The BBC asks, "Is Google too powerful?"

Google is a privately-owned US company that has a policy of collecting as much information as possible about everyone who uses its search tool.

It will store your computer's IP address, the time/date, your browser details and the item you search for.

It sets a tracking cookie on your computer that does not expire until 2038.

This means that Google builds up a detailed profile of your search terms over many years.

Google probably knew when you last thought you were pregnant, what diseases your children have had, and who your divorce lawyer is.

It refuses to say why it wants this information or to admit whether it makes it available to the US Government for tracking purposes.

And the much-loved Google toolbar tells Google about every web page you look at.

Google's privacy policy says,

Google does not collect any unique information about you (such as your name, email address, etc.) except when you specifically and knowingly provide such information. Google notes and saves information such as time of day, browser type, browser language, and IP address with each query. That information is used to verify our records and to provide more relevant services to users. For example, Google may use your IP address or browser language to determine which language to use when showing search results or advertisements....

Google may share information about you with advertisers, business partners, sponsors, and other third parties....

By using the Google Search Services and our web site, you consent to the collection and use of your information as we have outlined in this policy and to our Terms of Service Policy....

The two sources don't seem contradictory to me, except the BBC article does say, "[Google] refuses to say why it wants this information or to admit whether it makes it available to the US Government for tracking purposes" while Google's privacy policy does say something about what they do with this information and that they don't disclose any personally identifiable information to any third party (except "if required to do so in order to comply with any valid legal process such as a search warrant, subpoena, statute, or court order."