Its unlikely that your competitors are clicking ad's. Whilst its possible, you have to go to a fair bit of effort, as each click on an ad from a single ip isn't counted over and over. So you'd have to keep logging off the net, and then logging back in, clicking again and repeat. They could also get stopped by the other google preventative measures such as cookies.
So they may click on your ad once or twice, but you can't just click on someones ad over and over again and use their whole budget.
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