Natalie Haynes: It watches, it remembers, it answers our prayers – is Google now God?

As supplicants once petitioned their saints, we approach the altar – for the nearest pizzeria

(Darren Diss)

In the preface to his Panopticon; or, The Inspection-House, Jeremy Bentham explained the virtues of his new all-seeing building: "Morals reformed – health preserved – industry invigorated – instruction diffused – public burthens lightened ... all by a simple idea in Architecture!" By constructing a round building in which inmates could be watched from a central tower, Bentham believed he could cut prison costs at a stroke, because fewer guards would be needed when the inmates could have no idea if they were being watched or not. The theory is that people behave differently – better – if we believe someone is watching us.

For anyone who believes in an omniscient god, this idea was and is nothing new. Religious leaders (and political ones, when it suits them) have spent millennia peddling it. Of course someone is watching you at all times, and of course that affects how you behave.

That's what God does, in between allowing wars and famines and natural disasters to happen because he moves in mysterious ways. He knows if you shoplift sweets from wherever people shoplift sweets now that Woolworths has gone, and he judges you accordingly. Because of this, goes the theory, you don't shoplift.

But now God has had to take a back seat, on the omniscience front at least, to Google. Actually, the internet giant probably has more money than God, too, though perhaps less than some of his churches.

Google's new privacy policy, announced this week to much suspicious cancelling of accounts and threats from the European Union for breaching data protection laws, has revealed just how much of our lives Google now surveys. Even the most ardent visitor to the confessional might have forgotten to mention a couple of videos they watched on YouTube. Or if they did mention it, they wouldn't necessarily think to explain the search terms they had been using to get there. But Google sees and it remembers. And now it also shares this information across more than 60 of its services.

How you feel about this depends on how private you are. It has nothing to do with your morals, in spite of what the "If you aren't doing anything wrong, why would you care if you're filmed on CCTV 10 times a day" brigade would have you believe. I live a life of such girl-scoutishness that only the occasional bout of knitting makes my day exciting. I'm not particularly secretive. But I dislike intensely the idea of being filmed or watched or traced without my knowledge and consent.

For me, the excitement of being able to see anywhere in the world on Street View is far outweighed by the creepiness of knowing that everyone else can look at my home on it. Actually, they can't, because I wisely don't live at ground level. But the point remains.

There's a house not far from mine which used to have armed policemen standing outside it, on the pavement. By armed, I mean with guns, rather than truncheons. Intrigued by this, my boyfriend came home and Googled the address. It had virtually no web presence at all, but it still took him less than a minute to solve the puzzle: it was the home address of the ambassador of a Middle-Eastern country, information that was obviously sensitive. But since the couple a few doors up had divorced, and the value of their house had been contested because of the risk of the ambassador's house being attacked, there it was on Google.

And while most of us don't live such risky lives as the ambassador in question, we still may not be comfortable with the idea that anyone can find out where we live in a matter of moments. Then look at our back gardens from above, and at our doors and windows from the front. This level of observation extends past Bentham into God-territory: at least it was only the Panopticon's inhabitants who were watched with such vigour. Their visitors could go home, unsurveilled.

Omniscience is a troubling characteristic in anyone: even gods didn't have it until the Judaeo-Christian tradition. The Greeks and Romans were quite happy with a king of the gods who spent half his time not knowing what was going on, as other gods plotted and schemed behind his back. In the fourth book of Virgil's Aeneid, for example, Venus and Juno plot against Jupiter. It's only when Iarbas, one of his many illegitimate children, complains to him in prayer that he finds out what's been going on. There is a character in the book who sees and hears everything, but she is the monster, Rumour, than whom, Virgil wryly observes, there is no swifter evil.

Even the most benign of figures, Father Christmas, acquires a sinister aspect when he becomes a watcher. He sees you when you're sleeping, he knows when you're awake. He knows when you've been bad or good, so (and here comes the thinly veiled threat) be good, for goodness' sake. But perhaps that's the problem: too many of us have treated Google as a kindly, bearded old search engine who gives us presents (free email accounts with good spam filters! Free videos of cats that look like hovercraft!), while expecting nothing in return.

And when Google demands a fee (in information, which is, of course, more valuable than money), and turns out not to be Santa Claus after all, then we aren't sure we want to pay up.

In the end, we created the internet gods that now make us so nervous. We entreat them as supplicants once petitioned their saints. We approach the altar, demanding to know where the nearest pizzeria is, what Justin Bieber is for, and whether this sneezing fit is a terminal illness or merely irritating.

But we have given Google the information it has on us, and we have done so willingly, because it makes our lives easier when search engines remember our favourite sites, or if our Gmail keeps a list of our contacts.

We used to fear losing our mobile phones because we'd lose all our friends' details. Now we've come to fear the opposite: that by keeping those details in Google's databases, safely independent of the phone that might be stolen, they won't ever, ever be lost.