Google accused Microsoft Tuesday of copying its search results, an accusation to which Microsoft responded to with a blase, “So What?”

Google’s anti-webspam engineer Matt Cutts accused Microsoft on stage at a Bing-sponsored event of copying Google’s results by watching what people search for using the Internet Explorer 8 toolbar and click on at Google.com, and then mimicking those results on Bing.com.

In fact, Cutts said, Google suspects that much of Bing’s improvements have come from copying Google. To test this hypothesis, Google manually set up fake results pages for very random queries, sent 20 engineers home to search on those terms using a computer with the IE8 toolbar, and weeks later those same fake results for those random results showed up on Bing.

“We proved that,” Cutts said. “Our suspicion is that click data from the tool bar is not just for synthetic queries but for very many search queries.”

Bing’s result’s weeks later:

Sitting next to Cutts, Microsoft vice president Harry Shum didn’t deny that Microsoft was watching what people searched on and clicked on in Google.

“My argument is that users use search engine they are actually willing to share the data. We are collectively using the data to improve the search engine,” Shum said. “Everyone does this, Matt.”

Cutts shot back, “We don’t use clicks on Bing’s users in Google’s ranking.”

The back-and-forth came on stage Tuesday morning at an event called Farsight 2011, sponsored exclusively by Bing. The event, taglined “Beyond the Search Box,” was intended to focus on the future of search.

But the future was quickly taken over by the present after the issue of Bing’s plagiarism was reported by Danny Sullivan at Search Engine Land.

In a written statement, Google Fellow Amit Singhal took aim at Microsoft (oddly the underdog) for not innovating.

“Our testing has concluded that Bing is copying Google web search results,” Singhal said. “At Google we strongly believe in innovation and are proud of our search quality. We look forward to competing with genuinely new search algorithms out there, from Bing and others—algorithms built on core innovation, and not on recycled search results copied from a competitor.

Microsoft replied to the accusation in a blog post, trying to downplay how often Bing copies Google’s search results.

“We use over 1,000 different signals and features in our ranking algorithm,” the company wrote in a blog post. “A small piece of that is clickstream data we get from some of our customers, who opt-in to sharing anonymous data as they navigate the web in order to help us improve the experience for all users.”

Cutts, though cordial, ended the panel, saying he didn’t understand why Bing was copying Google.

“I’ve been doing search for a decade and never seen anything like this,” Cutts said.