In that case, they would have to offer a completely different product just for Germany, or leave this market altogether. Neither option is likely to be viable for Google.

Might be only Germany for the moment, but I wouldn't be surprised if you see more jurisdictions ruling this way, e.g. there's a case in Canada at the moment where it claimed a musician was a sex offender.

And locally, in Australia we don't have the US style "safe harbor" protections, so companies are already liable for content shown on their sites regardless of who creates it. If courts already won't accept "But somebody else wrote that" as a defence, they won't accept it when it's the companies own products producing it.