I think it's a fair precedent. If Google feels the content is not defamatory they can take that position in court with consequences if they are wrong. The downside is this ends up like the DMCA where companies are likely to take down all content complained about because of the risk/reward tradeoffs but if we already do that for alleged copyright violations doing it for alleged defamation seems much more reasonable to me. They also don't have to remove all self-evidently defamatory content, just all self-evidently defamatory content they are notified they are serving.