Google states that its new privacy policy allows it to build a more "intuitive user experience." For example, if you're working on Google Docs and you want to share a file with someone on Gmail, "you want their email right there ready to use."

"Our privacy policies have always allowed us to combine information from different products with your account.... However, we've been restricted in our ability to combine your YouTube and Search histories with other information in your account. Our new Privacy Policy gets rid of those inconsistencies so we can make more of your information available to you when using Google," the company states.

"I don't know of any legislation on this subject," said John Webster, a senior partner with Evaluator Group, a market research firm that specializes in data storage issues. "You have to ask yourself, what's the business model. If the business model is to make money from a service or money from advertising, that's one thing. If it's trying to make money off the sale of data, that's another thing."

While older Internet users tend to be wary of how their data is used and protected, younger users rarely consider the consequences of where they store personal information, Webster said. "They may not be reading the fine print."

The other issue to consider is what happens to your data when you leave a cloud service behind, he said.