Google contends the move simplifies and unifies its policies across its various services such as Gmail, YouTube, Android mobile systems, social networks and Internet search.
"The new policy doesn't change any existing privacy settings or how any personal information is shared outside of Google," Google privacy chief Alma Whitten said on the Google Blog today.
"Google isn't telling you about protecting your privacy. Google is telling you how they will gather information about you on all 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. It's a spy policy."
A coalition of European and US consumer advocacy groups made a last-ditch appeal to Internet search and advertising giant Google on Wednesday to delay the changes.
In a joint letter to Google chief executive Larry Page, the Trans Atlantic Consumer Dialogue urged Google to delay implementation of the changes, saying it would "combine data from all of your services ... into a single profile without user consent and without any meaningful opportunity for users to opt-out."
The French consumer data protection agency CNIL warned this week that Google may be in violation of European privacy norms.
US Federal Trade Commission chairman Jon Leibowitz has said Google is forcing users to make a "brutal choice" - ending its use of the service or complying with the new monitoring scheme.
Technology analyst Shelly Palmer said Google had gone too far.
"I don't think any single thought about the aggregation of data or the use of technology has ever made me as uncomfortable as (Google's) announcement," Palmer said in a blog post.
"On its best day, with every ounce of technology the US Government could muster, it could not know a fraction as much about any of us as Google does now."
Google announced in January it was revising its privacy policies and changing how it uses data from users of its services to provide more personalised search results and advertisements.
The Mountain View, California-based firm said the changes are designed to improve the user experience across the various Google products, and give the firm a more integrated view of its users, an advantage enjoyed by Apple and Facebook.
"So in the future, if you do frequent searches for Jamie Oliver, we could recommend Jamie Oliver videos when you're looking for recipes on YouTube - or we might suggest ads for his cookbooks when you're on other Google properties."
Digital media analyst Rebecca Lieb said the move is important for Google's business plans.
"Google needs a 360 degree view of the customer now more than ever," she said. "Why? Because Facebook's already got it. Or is at least a lot closer to having it than Google is if all Google's information is separately warehoused.
"Facebook is currently better positioned than Google to 'know' what videos you're watching on YouTube, which Google owns!" - Reuters