Does google punish for finding cheap effective keywords?

My company has a deal with Staples that offers our members a discount at Staples for office supplies.
I did a search in google for simply "Staples".
To my surprise, only Staples showed up as a sponsored link on the right hand side.
I went to my google adwords campaign, and created a new ad that simply said "Discounts at staples etc.." and the only keyword I used was "Staples".
The minimum click price was 10 cents.
About 5 hours later, I discovered 5000+ impressions with an average rank of 1.2.
I noticed the keywords had been paused.
I looked and after only 5 hours, the price per click was raised from 10 cents minimum, to 1.00 per click.
Did Google do that?
Did Staples do that?
Why?
I did the same thing with UPS
Same result, after 3 hours, about 4000 impressions. Google paused the campaign. I checked the "UPS" keyword, and it had went from 10 cents per click […]

See original post by GoWithABC