Yep, I've heard this as well. AdSense and Webmaster Tools are the other ways that they use to manually penalize all your sites. I frequent some less-than-pure white hat sites (not black hat though) and this kind of thing happens a fair amount.
I once seen a case where someone had around 30 sites - some had AdSense and Analytics, most were in Webmaster Tools and then only a small fraction (say 4-5) were in neither Analytics, AdSense or GWT.
All their sites apart from the 4-5 got a manual penalty.
To me it's pretty clear that they've been doing this for a while.
It's fairly low of Google, but I guess their argument would be "if they use gray/black hat tactics on one site, they might use it on them all". (This is something I disagree with though since it is a very poor argument and hides the fact that you might be tracking a website as a favour to a friend etc)
kneukm03 Gogle is a register so the register data isn't hidden.
Then Google and ICANN are massively breaking the law and we'll shortly see dozens of people jailed in a massive FTC raid.
In-short, this is a 'classic' myth which isn't true.
Google are an ICANN accredited domain name registrar, yes. But all this means is that they can register domains directly and not have to go through other companies.
ICANN and the various TLD/ccTLD registrars don't share people's personal data around each ICANN accredited domain name registrar. You really think that when someone registers a domain at (say) GoDaddy, GoDaddy then e-mail that information to every other registrar out there? ;-) Even if they only shared it with (say) Google, they'd still be in breach of criminal law (data protection laws etc)
It only takes 6 figure of capital to become ICANN accredited and trust me, if they suddenly shared *everyone's* data with every ICANN accredited registrar (which would be highly illegal and break hundreds of data protection laws Worldwide), there'd be a whole lot more ICANN accredited registrars... especially marketing and mailing companies harvesting people's private information ;-)
So yep, the short answer is that this is a complete myth. Google being a registrar means nothing other than them being able to register domains directly and at wholesale prices.
And this aside, Google couldn't ban on WHOIS information anyway since WHOIS information can easily be faked. ICANN require that it's kept valid, but they don't enforce this regulation.
If Google did ban sites on WHOIS, all you'd have to do is register a domain, change it's WHOIS information to match your competitors, use every black hat tactic around on your domain, then report it to Google. Bang, your competitors are banned too.
In-short, I hope you can see why this isn't the case ;-)