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Fast forward 6 months later. I did the check again and noticed this competitor was still getting the same backlinks. I looked at the cache of the page and noticed that all the pages that were counted as backlinks had his link as an Adsense link on the authority site.
Is this an error on the side of Google? How can this happen?
If you are using link:www.exanple.com then this is very different. It is also hard to understand how Google could count these links as backlinks when you concider the sort of url an adsense click is sent through. The url doesn't point to the final destination page it goes via Googles tracking applications.