Google Privacy Issues

Students at UC Berkeley have begun a class action lawsuit against Google, claiming that they breached state and federal wiretap laws.  What is especially concerning is that Google scans and stores data of anyone using its Apps for Education, whether or not that organization has turned ads off or not.  Scanning and indexing an inbox does provide Google with fodder for targeted advertising, but it also allows Google to provide services such as spell check, virus protection, and automatic spam filtering and it cannot be turned off.  The main contention in the case is that use of student data in this way violates FERPA, but Google asserts that users of Google products consent to having their information data mined when they log in to the services.  How about you?  Did you know that Google scans and compiles all the data that passes through their products?  Do you think that a loss of privacy is worth it for the services Google provides?