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I sometimes buy private label articles. I always rewrite them before I use them.
It is not uncommon for me to search a phrase from those articles. It is also not uncommon for me to find the excact same phase on 8-10 Google listed sites.
When I visit those sites I find that those sites pretty much used the exact article with no modifications. Some of those sites will rate higher than others if I use a keyword only for the seach.
My conclusion, there is no such thing as a "duplicate content penalty". Other factors come into play such as overall PR or whatever else G uses to rate sites.
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