The following is direct from Google's Security and Privacy:
"In order to provide some of the core features in Google Apps products, our automated systems will scan and index some user data. For example:
-Email is scanned so we can perform spam filtering and virus detection.
-Priority Inbox, a Gmail feature, scans email message to identify which messages are considered important and which are considered not important.
-If you are using Google Apps (free edition), email is scanned so we can display contextually relevant advertising in some circumstances.
-Some user data, such as documents and email messages, are scanned and indexed so your users can privately search for information in their own Google Apps accounts.
*Google Apps data is not part of the general google.com index, except when users choose to publish information publicly."
The "Scroogled" campaign has nothing to do with products or customers; the point is to broaden the PR base for Microsoft's ongoing campaign to convince the feds to initiate anti-trust proceedings against Google. That is why they hired a political PR executive to create the campaign.