You probably know Google’s informal company motto “Don’t be evil”. Google is a very successful company that knows a lot about its advertisers and users. In addition, Google has a market share that would allow them do certain things.
What could Google do if they were evil? Note that the following is only hypothetical:
Google could favor its own products and websites
Google could prefer websites from its own services in the search results: websites that run Google ads, websites that use Google’s payment service, Blogger sites, Google Base, etc.
All websites that pay Google in some way could be SEO friendly and preferred in the search results while others are downranked.
Google could punish websites at discretion
If Google doesn’t like your website or if someone tells Google that you’re a bad boy then Google can ban your website from the search results without any reason given.
You can find a lot of articles on the web that discuss the problem that Google removed web sites from the index. The main problem with these removals is that Google usually doesn’t explain why a web site has been removed so that webmasters often are complete and utterly at Google’s mercy.