Report directly to google here : http://www.google.com/contact/spamreport.html. If the website is engaging in link sell or purchase, report google using google webmaster.
hem1234: I'm login to my google webmaster tools. I can't see any links for me to report. ragamsky: Yes they get a good result freespace: How do report them to spammer site?
I wouldn't like it if my competitor was spamming but I would never report them, I'm not a snitch. And besides Google finds out one way or another.
In SEO terms, cloaking means practice of showing two different versions of any page - one for the normal visitors and other for the Search engines. This is a black hat technique which deceives SE to think that a particular page is of relevance and quality.
If report also no use better use some good anti virus to block it...or contact the host first instead of contacting Google