Google Adsense offers an option to block certain ads from appearing on your pages, though these are content-based. For instance, a Webmaster would never agree to display ads of his competitor. In that case, the Ad Filter blocks those links.
However, a WebmasterWorld thread says the Google Ad Filter is not functioning. In other words, the Google AdSense Competitive Ad Filter is not blocking the URLs which are added with it. Someone in the forum strongly commented, One of the domains that is now appearing in AdSense ads on my site has been in my competitive ad filter for over 3 years. The same problem was faced by many other users too.