There are third party click fraud and forensics companies that can investigate this for you. You can also call Google (866-2-google) and ask them to investigate...
In the mean time you could block specific IP addresses in your AdWords settings to block your competitor from clicking on your ad...

In general, unless you are constantly optimizing your CPAs will naturally go up as more advertisers enter the auction for your keywords. Take a look at your impression share report and you historical ctr's to see if anything changes drastically....

In general, Google is pretty good about detecting click fraud and not charging you for it, but it can't hurt to verify...

If you need deeper proof you can match up your serverlogs to AdWords reporting and show any discrepancies to Google.

Good luck.