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Google has an automated algorythm, however they ALSO have manual review for popular sites... spammers dont care because they rely on scraping the bottom of the internet.
if your content is not updated and sucks, a reviewer will give it a negative spin. Basically their updaters classify the data as 'vital, useful, not so useful and useless'
the updaters are region specific. americans update american sites, etc. no I dont know how they determine what is an american site or indian site, etc.
but basically your site should not have a gay ass splash page, and nor should it have spammy content pages... IE, if a manual reviewer finds your site useful, but annoying, you will get penalized.
Yes, they play favorites. some people are set for life should they continue updating.
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