Yup, this came up during the uproar when Google changed their privacy policy earlier this year. IIRC this language is needed to let them share your data across

Yup, this came up during the uproar when Google changed their privacy policy earlier this year. IIRC this language is needed to let them share your data across services. e.g. showing your profile photo as part of their social search results might quality as "publicly display". Google's current privacy policy includes the statement: "We believe personal information should not be held hostage and we are committed to building products that let users export their personal information to other services. We don’t sell users’ personal information."