I find it difficult to believe that no one at Google pointed out to management that this behavior was a very serious invasion of privacy. High level Google execs must have known of such objections and either ignored or overruled them, which means Google is deliberately and consciously invading privacy.
I'm also shocked that given the public's and media's increased sensitivity to invasions of privacy by technology companies, as is evidenced by the outrage over Facebook's actions this year, this news wasn't leaked by someone at Google much, much earlier.