The European commission has signalled a peace deal after a three-year dispute with Google, accepting a third offer from the search company that would give rivals and advertisers greater screen prominence for their products and services.

Joaquín Almunia, the European commissioner for competition, said the latest offer from Google was acceptable, though the final decision to ditch legal action against the firm would take months more. The agreement will cover both desktop and mobile use, and last for five years.

But rivals and complainants in the case, launched in November 2010, strongly criticised the proposed settlement, arguing the EU regulator had been outwitted by the world's biggest internet search firm.

"The new proposal from Google after long and difficult talks can now address the commission's concerns," Almunia said. "It provides users with real choice between competing services presented in a comparable way."

He said he expected objections from the complainants but did not expect to change his mind.

Under the deal thrashed out in January, Google search results will continue to show other Google services and products such as its paid-for shopping links prominently, but alternative suppliers will also be highlighted prominently on screen. That means if a Google advertising link has a picture then so will the alternatives, which will have to pay Google for their position.

Almunia said he was so satisfied with the Google offer that there was no need for the outcome to be market-tested by rivals and complainants for its effects on users, as previously happened. The latest decision drew protests from rivals. Google's first two sets of proposals were subjected to market-testing and found wanting.

"Hard data from market tests proved the previous settlement would not work. We need time and opportunity to ensure full technical assessment of how effective the proposed remedies would be," said David Wood, legal counsel for Icomp, a lobby supported by Microsoft.

"Without a third-party review, Almunia risks having the wool pulled over his eyes by Google … we do not believe Google has any intention of holding itself to account on these proposals."

The Allegro Group, a Poland-based e-commerce company, said: "We are very disappointed as the solution proposed does not address the fundamental issue of ensuring a level playing field for the European internet economy.

"They fix Google's market share in a new segment at no cost to its business and require rivals to pay for access of a far smaller share of the market."

Almunia dismissed demands that service and product suppliers should not have to pay to be carried by Google, and described the latter's proposals – which now need to be legally binding and placed under independent monitoring – as "far-reaching with the clear potential to re-establish a level playing field". He added: "We believe Google's final offer can address the competition issues."

Google was previously investigated on antitrust grounds over its search results by the US federal trade commission, which concluded in January 2013 that "the introduction of universal search, as well as additional changes made to Google's search algorithms – even those that may have had the effect of harming individual competitors – could be plausibly justified as innovations that improved Google's product and the experience of its users." The FTC did not sanction the firm.