They admit to letting you sort your negative reviews to the bottom if you advertise? Or to restore five-star reviews which were "flagged as spam" if you advertise?
Do you have a citation for this? I don't mean to call you out but I have no idea what yelp has admitted to.
And even if they did admit to it, that seems about as "damning" as it gets for a site whose value proposition is based almost entirely on its credibility.
I don't think that's even Yelps primary value proposition. They're much more of a social network than anything else. Their proposition seems to be more around providing a place for people to gain recognition for their taste. This is why they have the elite yelper program and what-not.
The result of that play is a huge site with a TON of reviews that create a lot of organic SEO traffic. The credibility of those reviews, while important, isn't really their upmost concern.
That's why withholding positive reviews (under the guise of spam control) is effective. They're effectively extorting you to create more content for them.
Is it intentionally designed that way? I have no idea, but I bet it's extremely effective.
Do you have a citation for this? I don't mean to call you out but I have no idea what yelp has admitted to.