Last week, CNIL, France’s data protection watchdog, fined Google as much as is in its power for what it considers privacy violations. Google is appealing the fine.

While the fine is the maximum CNIL can charge Google – 150,000 euros ($203,500) – it wouldn’t amount to much of a dent in Google’s budget, but Google is appealing on principle.

The AFP shares a statement from a Google spokesperson, who says, “We were fully involved throughout discussions with the CNIL (France’s data protection watchdog) to explain our policy of confidentiality and the way in which it allows us to create more simple and more efficient services. We are appealing its decision.”

The whole thing stems from the major privacy policy overhaul Google launched two years ago. It essentially enables Google to share user data from one of the company’s services to the next. Nothing changed with regard to sharing data with third parties. Google paints it as a way to make its products better, and really, that’s what it should do, at least if you like your web services personalized and knowing a lot about you.

But some people’s idea of what Google product use should be and Google’s internal business strategy don’t always align. A YouTube user may not consider himself a “Google” user. That was made abundantly clear when Google launched the new YouTube commenting system, which is based upon Google’s social layer, Google+.

Some think Google is well within its rights to use the data it gets from the use of its own products in its own products, but others think these products should be kept separate. Google’s strategy, meanwhile, has been to build a larger, all-encompassing Google, which consists of all of its products. That is what the privacy policy enables it to do.

Unfortunately for Google, not everyone is keen on that strategy, and that’s why it was fined.

Now, pending regulatory approval, Google is acquiring Nest, which makes home devices like thermostats and smoke detectors. Some will be wondering if data from these smart devices will be used across Google products as well.

“Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services,” Nest said in its announcement. “We’ve always taken privacy seriously and this will not change.”

It also said, “Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together.”

Image via Google