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What should I do about competitors who spam the search engines?
You mean they use blackhat technique for boosting their rankings or they use spammy blackhat on your site to get you penalized?
If they are using it for their own sites, you can do nothing. Matt Cutts says, you can report them, but that would make you a snitch. SEO is a tough business, 90% of self proclaimed "SEO experts" are falling behind. Learn about SEO, you won't always be able to report spammers.
If they use it to penalize your site, than you won't be a snitch if you report "unusual backlinking activity" in your Google Webmaster Tools account.
+ since you sell some BH as well, it would be very immoral to report competitors.
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Just build quality backlinks and unique content for your sites and you should be over your competitors who spam the search engines.
It is annoying if you cannot get to the top rank because your competitors are using methods that are unethical and not legitimate. But I don’t think it is also ethical to do something about it. If they want to spam their web pages with too many keywords or excessive backlinks on one site then let them be. Sooner or later they will meet their match and suffer the consequences. At least you are not involved.