Multiple trains at large
The problem we see here, and for that matter, in a large number of other issues here in the US, is that the perceptions are different.
The fact is that Google is providing a service at no direct cost but is making money from your use of the service. Kind of like a free-to-trade broker, right?
The problem is that they know or want to know everything about you. They know where you sleep, where you work, who you talk to, what you search for, where you shop IRL. They once said that they wanted to be so ingrained that if you were out of milk and you were passing by a grocery store, they would remind you to get milk. I forget, did they get patient records in the UK? So maybe they know about your cancer and herpes too.
At one level, that's kinda cool. I mean, there's your personal secretary that can help schedule your *entire* life. For free. But they don't actually work for you. And we're not real sure what they're telling others. And if that treasure trove of data were ever breached, how do you think that'd go?
My grandmother and I were talking once about the government and surveillance after 9/11 and one of her responses was the typical 'if you don't have anything to hide, why would you worry'? In today's world, is there a truly private place you can go? Think about that. (Again, cool at one level but...) The problem is that there's no clear chain of custody once the data you generate goes to the cloud (most clouds really, not just Google), at a personal level. Anything you do from now to forever is out there and could bite you in the ass.
I still content that Google is the nicest overlord we'll ever have. (Full disclosure - I finally personally own an Android as about 2 months ago. Some of the things that have happened since then weird me out and I look forward to getting my replacement non-google phone)