You're imagining a fictional, united evil government acting as a single entity. In real life right now, any given government has numerous bad actors at various levels who can and do use data to persecute people and groups they dislike. Most of the time, they still need real data, but it's a messy multidimensional spectrum and sometimes they can fabricate it. Another thing you're missing is that they're using this data to find the people they want to persecute.