Doesn’t seem like it should be Googles job to fact check the internet. Go after the liar, not the search engine.
Google seems no more responsible than your ISP for sending it to you or your monitor manufacturer for displaying it.
They weren't required to know the truth from the get go, but they had to remove the libel on notice. Perhaps Google disagreed that there was anything wrong with the assertion that this person was a stalker, but that's a rather risky position to take without any criminal convictions to base their claim off, and a stupid one from a business sense.
Furthermore, their autocomplete is entirely their product, you can't go after anyone else for that.
I imagine this approach wouldn't work in other countries, but if the lawsuit really was baseless in Australia, Google would've won a long time ago, rather than settle now.
Auto-complete also gives the impression that other people have searched or found it, so it must be valid, despite having little correlation. If an employer starts typing your name and google says you're pedo, you're probably not getting the job
Seems it is the opinion of the court that Google is rebroadcasting and amplifying slander and refuses to stop when notified and when ordered to do so.