Google recently did a major algorithm update to their search engines. This update is called the Google Panda Update. It consisted of removing all low quality websites, farm links, duplicate content websites, etc from their index. For example,Ezine website saw its traffic decrease by almost 75% because people would post low quality content and articles just to get backlinks to their website.
If your website is of good quality and follows all of the Google guidelines, then you shouldn’t worry about the Google Panda Update, it will not affect you. However, if your website does follow all the guidelines and you still got penalized, then it is most probably because you had a lot of inbound links coming from those low quality websites and link farms, and since they got removed from the index, the links have no more value.