It is an extraordinary market play. And an unsettling one. For it seeks to place Google (GOOG), which already collects vast amounts of data about our Internet use, at the very center of our information experience.

The privacy implications are, of course, horrendous. And while Google will inevitably dismiss such concerns as paranoid and argue that any data the company might collect at the OS level will be used only to improve its services and benefit users, it should still give us all pause. Because when it is finally launched, Chrome OS will be yet one more deep well of consumer data to which Google will have access.

There are already quite a few such wells, including Google Search and Chrome, that profile user interests and surfing habits: Gmail, which gives the company access to our email conversations, and Google Voice, which gives the company access to our spoken ones. Add to this Google Street View and Latitude, a service that tracks the physical location of its users, and mobile and desktop operating systems and, well…that kind of consolidation of Internet-based services around a single dominant company should give us all pause.

Lest we forget, Google is in the behavioral targeting business. Why would people ever use an OS developed by a company whose business is based on meticulously recording and analyzing their online behavior? Because they enjoy using its other services, I suppose. But there is a privacy-vs-ease-of-use tradeoff here. And with Chrome OS, it is unprecedented. Further, while Google might tout its “don’t be evil” motto as reason enough to trust the company with our data, there are other entities that don’t always share that sensibility. Remember, it wasn’t so long ago that the federal government tried to force Google to turn over user search data to the Justice Department…

“Competition in the OS market should always be welcome, but Google is the special case,” Marc Rotenberg, executive director of the Electronic Privacy Information Center, told Digital Daily. “It has become dominant across many essential Internet services–search, mail, video, online apps, and advertising. Coupled with Google’s growing profiles of American consumers and reluctance to adopt meaningful privacy safeguards, we expect that antitrust authorities in the US and Europe will view Google’s entry into the OS market with enormous skepticism.”

Jeff Chester, executive director of The Center for Digital Democracy, echoed Rotenberg’s concerns. “Google’s new OS has to be placed under the data collection X-Ray by US and EU privacy regulators and advocates,” he said. “Any expansion into the marketplace by either Google or Microsoft should generate intense scrutiny, especially for the privacy implications. These two are engaged in a global data collections digital arms race, which has far-reaching implications for consumers and their information.”

Handy tools for when you’re researching a medical condition at work, shopping online for family Christmas presents, or you know, SURFING PORN, which is, after all, what the Internet was designed for. …

To date, 27of the 33 have responded, among them Google and Yahoo, whose replies are of particular interest given the proposed advertising deal between them. In response to the Committee’s query, Yahoo admitted it did engage in some form of behavioral targeting, but volunteered that it would henceforth allow users to turn off targeted advertising on its Web sites.

Yahoo claims it had been planning this revision to its policy for months. What a happy coincidence that it was enacted in time to be included in the company’s letter to the Committee.

Google also acknowledged using targeted-advertising technology without explicitly informing customers–hence, its $3.1 billion acquisition of DoubleClick. And it too suddenly offered its users a way to opt out of targeted advertising. Another happy coincidence, I suppose, in the works for months and entirely unrelated to the company’s pact with Yahoo, which would reportedly grant Google control over more than 80 percent of the search market.

Still, it’s good news for consumers–or rather those consumers who actually pay attention to such things. And for those who don’t, a word of advice: It might be time to start. Because Google, which already controls more than 70 percent of the search market in the states, clearly sees quite a bit of behavioral targeting in all our futures. “Though it is not the focus of our business today, we also believe that behavioral advertising can be done in ways that are responsible and protective of consumer privacy and the security of consumers’ information,” Google wrote in its letter to the Committee. “To ensure the continuation and proliferation of responsible behavioral targeting practices, we are supportive of efforts to establish strong self-regulatory principles for online advertising that involves the collection of user data for the purpose of creating behavioral and demographic profiles.”

So why is it we need one of these things again?

No one seems to be sure, really — not even the PC vendors making them.

“At this point, you can expect all the major players to get into this market,” IDC analyst Richard Shim told eWeek. “The question is what is there level of commitment and what is their target audience and how much do they expect it to grow. A lot of the companies I talk to say, ‘We’re doing this as a defensive measure and we’re concerned about the success of some of the more aggressive players that have entered this market.’”