Lets talk about when to use AdSense - Competitive Ad Filter. It is very rarely used to block competitors. However you can use it to provide a better viewing experience to your site's visitors.

I noticed that there are hordes of directory sites which bid for low paying keywords on a subject and direct people to their sites. Their sites are pretty barren of useful information and often auto-generated. Yes they too use AdSense but that is beside the point.

I don't know about you but I don't like browsing to any such site for two reasons:
1. I don't get what I am looking for.
2. They are mostly auto-generated and the content, if any, is haphazard and extremely hard to find.

And I don't want to direct my visitors to their sites either. So I add them to my competitive ad filter. I don't care if they are paying top dollars for bidding on a keyword or if there are no ads for the post, which happens more often then you can imagine. They are just junk.

I am thinking of publishing my ban list but I need to check the TOS first.

In the meantime just look for sites with info / search in their domain name. Sometimes they disguise with innocuous souding names too.

Caution: Make sure you don't click on an ad while checking. I normally right-click (carefully) and copy the url to notepad and then manually extract the actual url of the site. Then I load it in browser to verify. Hope there was a simpler way.

If you make a mistake promptly inform Google Support to subtract the click.

Hope that helps.