If I understood his post and overall point correctly, he doesn’t think that it’s that second possibility — that Google is a benevolent tyrant, essentially — but that that’s the only other explanation, which is bad.
(I agree that the language he used was a bit much, but I think he was using exaggeration as a legitimate literary device to make his point, not in an attempt to actually mischaracterize that scenario.)
He think it’s the first possibility — that Google is doing it for reasons other than the users’ best interests (i.e. “nefarious purposes”) — which is even worse.
Calling this feudalism is a bit much.