Forum Moderators: Robert Charlton & goodroi
All the hosted sites have had hidden links placed in their home page footers pointing back to various pages in the 'mother' directory. I guarantee you none of the independent widget sellers know of or would agree to such a scheme. They would definitely be opposed to visible links to that directory since they're paying for their listings in the first place.
If the nearly 500 sites get banned for hidden text (and probably won't know because they're not webmasters), will the directory likely get banned, too?
I'd hate if the mom & pop sites disappeared because their trusted hosting company was cheating and using them to boost its own position.
I know some will read this and ask why the mom & pops don't just change hosting companies. Like I said, most won't know what is happening, plus the 'mother' company also has them tethered with proprietary business software and other long-term agreements.
BTW, the 'mother' company's own e-commerce site is not part of this scheme.
There is a good chance that the whole network could be banned or penalized by Google, yes. I've seen that happen with SEO company sites. This is one type of scheme that I suspect has triggered the Minus Thirty penalty for the core domain - the hosting company in your example.
That's not saying it "will" happen in any specific case, just that it certainly could happen.