Reasons Google is doing this is because they want to give websites with better content and those who can't afford SEO experts a better chance to rank higher in the search results. Bing is a part of the action as well.
How can you avoid being penalized, by focusing more on providing very good quality content. If you already do this, then you shouldn't be affected. But if your primary focus is always on keywords or SEO, you got a chance to make some changes before this takes effect in the next few weeks or so.
I just said in a previous post you should be giving grandma what she wants and Google will give you what you want. If you are one of the ones who always provides good quality content on your sites and blogs, you should be fine. This is for more targeting people who just focus on their rank rather than providing helpful content for others. And if you exchange a bunch of links this can affect you as well. So you should be less focused on SEO and put your mind in quality mode.
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