Correct, the objection is over the linking of data Google collects in various services. Data protection laws probably vary a lot from country to country, with a certain "minimum" required by EU law. I don't believe Google collects any more data today than it did a few days ago. Of course, such linked data is many times more valuable than having it all spread out without being able to combine it. It's also much, much easier to abuse the data this way.

I doubt that Yahoo, Microsoft, or other services (Facebook comes to mind) are much better at this than Google, it's just that Google is extremely visible.