Indexing search results
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One of our competitors indexes all searches performed by users on their site. They automatically create new pages/ new urls based on those search terms. Is it black hat technique? Do search engines specifically forbid this?
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This is not blackhat, but definitely Panda food. Unless they have a very high authority domain I don't see this technique working for them well (or at all) in the future.
Reference: http://googlewebmastercentral.blogspot.com/2011/05/more-guidance-on-building-high-quality.html
"One other specific piece of guidance we've offered is that low-quality content on some parts of a website can impact the whole site’s rankings, and thus removing low quality pages, merging or improving the content of individual shallow pages into more useful pages, or moving low quality pages to a different domain could eventually help the rankings of your higher-quality content."