Their economic incentives are aligned in exactly the opposite direction. The more they know about you the more money they make, ergo the recent privacy policy changes which now tie your data across all of their services. In my opinion this is already a privacy violation, even if they don't sell my data to unscrupulous marketers. It should be opt-in. I believe the relevant quote is from Eric Schmidt, ""Google policy is to get right up to the creepy line and not cross it."
If you read their privacy policy, there is an entire section called "Information we share" that is worth reading. It's short, so that's good.
But still, I don't completely buy the notion that as long as Google doesn't resell my data to some "unscrupulous" marketer they are respecting my privacy. If at some point in the future they buy-in to Zuckerbergs "everyone should be open about everything" philosophy and create another privacy policy that isn't opt-in... I guess we're all screwed.