No, the problems are harder to address. The easy thing is to have search engines remove the legally irrelevant information about person X from searches for X. Getting people to unsee information they've seen, or proving in court that a company used illegal information to deny somebody credit, is far harder.
In at least some cases, people have been successfully sued in the US for simply publicizing existing libel. In the case of false accusations, Google is doing exactly that. If the law says it is illegal to publicly associate certain information with a certain person, presumably to protect that person, then Google is violating that law. Google is apparently OK with following the law in the jurisdiction the law applies to.
The information is still out there on the net. It's just not available from one particular vantage. As far as censorship goes, that's minor.