It's not free, but you aren't paying money for it.
All of this “… then you are the product” stuff is totally meaningless legally and economically.
I mean… maybe? (How much is your data worth to google in dollars? Probably not that much.) But I think consumers understand how google makes their money. If your argument in court is “consumers are misunderstanding in dollar terms how much this is harming them,” then you are going to lose.