I'm sure you recall when Google came clean about collecting Wi-Fi network data with its Street View cars back in May of 2010.
"It’s now clear that we have been mistakenly collecting samples of payload data from open (i.e. non-password-protected) WiFi networks, even though we never used that data in any Google products," Google's Alan Eustace said at the time. "However, we will typically have collected only fragments of payload data because: our cars are on the move; someone would need to be using the network as a car passed by; and our in-car WiFi equipment automatically changes channels roughly five times a second. In addition, we did not collect information traveling over secure, password-protected WiFi networks."
According to a CNET report today, Google Street View cars not only collected locations of Wi-Fi access points, but actual street addresses and unique identifiers of computers and various devices using the wireless networks.
Google has been providing the following statement on the matter:
Location-based services provide tremendous value to consumers and the economy. In order to provide these location services, Google and many other companies detect nearby, publicly available signals from Wi-Fi access points and cell towers and use this data to quickly approximate a rough position. This can be done by using information that is publicly broadcast, including that list of Wi-Fi access points you see when you use the “join network” option on your computer and the access point’s MAC address.
We collect the publicly broadcast MAC addresses of Wi-Fi access points. If a user has enabled wireless tethering on a mobile device, that device becomes a Wi-Fi access point, so the MAC address of such an access point may also be included in the database. Wi-Fi access points that move frequently are not useful for our location database, and we take various steps to try to discard them.
Google is no stranger to privacy concerns, but this also comes at a time when Google is trying to gain momentum for several products that may eventually make heavy use of location-based data, such as Google Offers, Google+ and Google Wallet.
Whether or not Google is in the wrong, existing concerns may hamper users' willingness to participate in certain elements of their products, such as location-sharing.
That said, Google+ has had little trouble gaining momentum thus far, and has actually placed a great deal of emphasis on privacy itself, through the use of Circles, though not everyone's thrilled with the way picture tagging is being handled.
The Google+ mobile app does already use location to serve "nearby" updates.