A PBN begins with someone buying lots of old domains that have high authority in the search engines. Then, they start creating content on those sites while linking to their main website.
To give you a short answer: Yes.
PBNs are against Google’s guidelines. Websites that get caught practicing this often end up losing all their rankings in the SERPs.
Google will manually penalize any website that’s part of a PBN and cause it to vanish from top results.
While this used to be a popular method that marketing experts were proud to share, it’s no longer efficient. The SEO community now regards it as a black hat technique that you should avoid like the plague.
Private blog networks still exist to this day for one simple reason:
It's because they work.
Backlinks are one of the strongest ranking factors on Google. They're an honest way of telling search engines that a web page is valuable and provides helpful answers.
A PBN can help the main website boost its' rankings by passing link authority. The variety of authoritative domains tells Google that the central site is trustworthy.
That's what gives the main website a boost in the SERPs.
But, one thing to keep in mind is that Google is always on the look for PBNs. Any website that gets caught doing this will be severely penalised and is prone to lose all its' rankings.
It's unlikely that a website that's finding success by following these shady tactics will last long. Private blog networks may work for a short period, but they all disappear in the long run.
There are lots of legitimate link building tactics you can use to grow your business. And most of them will deliver better results in the long run if you take things seriously.
You shouldn't be intimidated by your competitors' results if you feel like they're part of a PBN.
Don't follow their path. Give it some time, and Google will take care of them for you.
Also, stay away from buying links from shady SEO agencies. Most of the time, those come from a PBNs. That will backfire on you and may even put an end to your business.