The new privacy policy by Google clearly states that they can and will records your activities on your android device. They can log:
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Device information
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your search queries
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telephony log information
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your phone number
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calling-party number
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forwarding numbers
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time and date of calls
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duration of calls …
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system activity, hardware settings, browser type, browser language…
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the date and time of your request and referral URL
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Location information
One can read the storyline via PC-Magazine
There is even one law suit from android user.