If you use Google services you're already trusting it to manage your personal information responsibly. Nothing has changed.
People say they take their privacy seriously, and who can blame them? There are all kinds of reasons to keep personal data personal, some of them better than others.
The way the Web works--and this is at least as much a business issue as a technical one--requires that we share some amount of personal information with the (generally free) services we use. A vast group of private companies and public interest groups have been built to feed off the genuine concerns as well as the paranoia about this issue.
Thus it was entirely predictable that outrage would be expressed when Google announced a major consolidation of their privacy policies. The most obvious effect of this change is to make their privacy policies simpler, which should be considered a significantly good thing and something that so-called privacy advocates have long called for.
But some people are only interested in constructing theoretical problems. Congressman Ed Markey of Massachusetts, always one to blow hard on these matters, says: "...it is imperative that users will be able to decide whether they want their information shared across the spectrum of Google's offerings..." Why? So Google might use your e-mail information in their calendar program? Both are run by Google. Whether it's shared or not, you're still trusting Google to keep it private.
The only reason I can imagine for users not wanting one Google service to have access to their personal data from another Google service is that they don't trust the other service as much to keep it private. There just isn't any logic to this. All the services follow the same policy. From a policy standpoint, none is any more or less trustworthy than the other. From a technical standpoint, perhaps you could argue that sharing among services increases the risk of accidental disclosure. Maybe there's a theoretical case for this, but it's basically just sophistry.
I read the whole policy and it's pretty accessible and understandable, which is not a common thing for privacy policies. Microsoft's privacy policies are much longer and more complicated, although that seems to come mostly from covering more bases. Google's policy seems designed to express broad principles in a simple way. Both approaches are defensible. Neither company's record on privacy is perfect, but I see no reason to believe that they don't both take it very seriously for the simple reason that users and the law demand it.
Nobody's forcing you to use any Google services and some (such as search) can be used anonymously. Don't like it? Take your business elsewhere.
The reason privacy policies have always been--and always will be--a contentious issue is that the isues are extremely complicated. The sort of user power that the EFF and Ed Markey advocate would result in significantly less-capable software. People say they take their privacy seriously, but the fact is that they're happy to share some of that information if it makes their software run better. Who can blame them for that?
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