We have used organic rankings and rarely buy links for our sites, however our competitors are buying tonnes of links and Google seems to turn a blind eye (maybe they have paid Google...) what can a company do to combat this? This is blackhat - NO?
Welcome to SEO world, this is how it works. Many buy links or even pay to get their links on the homepage of high PR site, but they don't reveal because the competitors can bid higher to place their links. If links are brought through phone lines, yes, not only Google all SEs can't tap millions of phone lines. If links are brought through e-mail, yes, not only Google all SEs can't hack millions of mail exception to few. If links are brought through public meeting, yes, not only Google all SEs can't assign millions of detectives all over the world. Yes, it's not encouraged by all search engines and it's not good work ethics. They should just follow their normal SEO strategy, link building, abide to all SE guidelines. Good Luck
Why do you think it's a blackhat? It's a business and if they are ready to invest money in their business, then they can do it as well as you can.
If what they're doing isn't acceptable as far as the search engines are concerned, then they shouldn't/most likley wont get away with it for too long. If what they're doing IS acceptable, then do it too.