By Miguel Helft
January 4, 2013

FORTUNE — When I asked Larry Page in November about claims that Google manipulated search results to favor its own services at the expense of rivals, he gave me a lengthy answer that more or less pooh-poohed the allegations:

“The way we think about it is that our customer is our end-user. People are really trying to get some information and get honest, accurate, well-ranked information from us. That’s our job one. I think that there are companies that do various kinds of specialized things, that they’re doing a part of what we do. We see the opportunity to build amazing products that are more than any of those parts. So one of my favorite examples I like to give is if you’re vacation planning. It would be really nice to have a system that could basically vacation plan for you. It would know your preferences, it would know the weather, it would know the prices of airline tickets, the hotel prices, understand logistics, combine all those things into one experience. And that’s kind of how we think about search.

You began by saying “your competitors.” I don’t think the companies that are complaining about various components of what we do are trying to do that. So again, I don’t kind of think about it that way.”

By then, Google (GOOG) already had a pretty good indication that the Federal Trade Commission, which had investigated the allegations for nearly two years, would not aim its antitrust enforcement powers at the company’s core search business. Still, the announcement by the agency on Thursday that it found no real evidence of so-called “search bias” is a major victory. It all but ensures that Google will avert the kind of major confrontation with the U.S. Government that derailed tech leaders of earlier eras, like AT&T (T), IBM (IBM) and Microsoft (MSFT).

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“We found unanimously that […] that they hadn’t engaged in illegal monopolization and had not violated the FTC Act,” Jon Leibowitz, the commission’s chairman, said during a press conference.

Under Page, whose successful tenure as CEO is the subject of a story in the current issue of Fortune, Google has regained energy, focus and momentum. While competition from Amazon (AMZN), Apple (AAPL) and Facebook (FB) among others, remains intense, few things had the potential to disrupt Google’s march forward more effectively than a fight with regulators. “Government intervention is Google’s biggest threat,” Paul Sagawa, an analyst with Sector & Sovereign Research, wrote in a recent bullish report about Google.

Now that U.S. regulators have backed down from a confrontation, Google’s rivals, led by Microsoft, are sure to press their case with the European Union and with attorneys general in various states. But Thursday was a day for Google to gloat. “The conclusion is clear: Google’s services are good for users and good for competition,” David Drummond, Google’s chief legal officer, wrote on the company’s official blog.

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The F.T.C. did obtain some concessions from Google: the company will license important mobile technology patents on “fair, reasonable and non discriminatory terms;” it will allow businesses to easily take their advertising campaigns from Google to rival search engines; and it will voluntarily agree to some changes in its relationship with “vertical” search engines like Yelp (YELP).

But as some analysts noted, those concessions, especially on ads and vertical search, were merely tactical. Google held firm on these issues until now with one goal: give something to the F.T.C. so it could close the search bias case and save face.

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