Inside Google

The firestorm over Google’s new privacy policy, which is effective starting Thursday, likely won’t end soon.

The Web’s leading search company drew fire early Thursday from Consumer Watchdog, which called the plan to offer a unified privacy covering all of Google (GOOG) Web products nothing more than “a spy policy.”

“Calling this a privacy policy is Orwellian doublespeak,” John Simpson, privacy project director for Consumer Watchdog and a longtime Google critic, said in a statement. “Google isn’t telling you about protecting your privacy. Google is telling you how they will gather information about you on all of its services, combine it in new ways and use the fat new digital dossiers to sell more ads. They’re telling you how they plan to spy on you.”

Google plans to change its privacy policy has drawn criticism from all sides including rival Microsoft (MSFT), members of Congress and the

European Union. Government officials here and abroad had reportedly asked Google to delay the launch.

France’s data protection watchdog, the CNIL, doubts the legality of the policy and informed Google it would lead a European-wide investigation into this, EU Justice Commissioner Viviane Reding told Reuters on Thursday. Reding said authorities are “deeply concerned, and that the new rules are not in accordance with the European law, and that the transparency rules have not been applied.”

In a blog post late Wednesday, Alma Whitten, Google’s director of privacy, product and engineering, assured users that the new privacy policy is easier to understand and is designed to help the company “build a better, more intuitive user experience across Google for signed-in users.”

It’s hard to say whether you, the user, should be concerned at all with the new policy, as PC Magazine points out . Lots of factors involved.

Google makes nearly all of its revenue from ads with most coming from text-based ads strategically placed near search results.

The company says the new policy doesn’t provide another avenue for collecting data on users that can be fed to advertisers.

“The new policy doesn’t change any existing privacy settings or how any personal information is shared outside of Google. We aren’t collecting any new or additional information about users. We won’t be selling your personal data. And we will continue to employ industry-leading security to keep your information safe,” Whitten wrote.

Google and Europe have been fighting over this issue for awhile, as we’ve reported.

Google shares were flat in early trading.