It sucks that this innocent person ended up suffering. Hopefully law enforcement will become better at figuring out false positives before arresting someone.
I do like that the gov. doesn't have direct access. Seems to me like the more independent parties required to access the data, the lower the chances of abuse.
Well not really. If that were the case and if someone was going to commit a crime they could simply place their phone in someone else's auto (let's say without them even knowing) and then have that data be the data that is 'them'. This would quickly unravel. Besides I don't think it's so much that the data is useful other than it gives clues and points in a particular direction whereby the police can then narrow down or look further into a particular suspect.
I can retain receipts from gas stations, getting a soda at the corner store, etc without needing to beam my realtime location data to the cloud.
I also always use a credit card for any transaction which gives another 'I was there' proof point.
Really, the issue here was the car, without which they wouldn't have had enough evidence to get the person's information in the first place. Are you not partly responsible to whom you give your car to?
If this is how it really happened then the investigators didn't even bother to crosscheck the data with the cell tower information (assuming the telco logs this info). Sending false location data to google shouldn't be that hard, but it should be a lot harder to fake the cell tower connections.