I think its pretty straight forward that privacy protection for Google means protecting the data it has collected from their users. Not refraining or preventing itself from collecting user data. Google protects the privacy of your information from outsiders (and insiders) not from its own apps and services. That is what's meant when Google says they "take their user's privacy very seriously". And its obvious that this is true because this practice is effectively just protecting their business model.
"We take very seriously your privacy and we make sure no one can see what you do...because THAT'S OUR JOB! Hey, you want to know what our customers are doing, we're more than willing to sell you the data and telemetry we collect, but ya gotta go through us! We take that very seriously."
> we're more than willing to sell you the data and telemetry we collect
Except they don't, they sell access to targeting based on that data. Google's entire valuation is based on the data they have on users, if others could come in and scoop it up, they would have an instant competitor. I think calling it 'privacy' is the wrong word - Google takes data security and access control seriously, and only Legal and a dozen engineers can actually access data (and even then, it'd be logged and looked into if it was out of the ordinary).
Yes, Google goes to immense lengths to protect user data in all its forms. That is security.
Privacy is orthogonal, and Google is well aware of the difference and how they complement each other.
You are completely wrong about Google's treatment of privacy.
There are plenty of companies that say they take privacy seriously. There are a handful that actually do. But smaller still is the number of those that have actually built what it takes to deliver on those promises, or re-engineered massive systems to deliver on privacy and transparency promises.
I suggest you look at any of Google's public privacy statements. There's no need to read between the lines.