The paper tries to justify its ethics with Google's privacy policy, which is laughable. There are so many papers about how meaningless privacy policies are. If Apple or Mozilla did anything remotely like this, Hacker News would riot.
Edit: I don't want to be a conspiracy theorist, but this post suddenly got a bunch of downvotes at the same time as defensive comments from a current Googler and recent ex-Googler. Then one of my responses below to a Chrome developer got flagged for no obvious reason. Hmm.