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Google to start permanently deleting users’ location history
(www.theguardian.com)
This is a most excellent place for technology news and articles.
This data can still be stored by the government.
In fact, google may be being told by the government to tell people that this data isn't being stored so people will be less concerned about it and not think it's being collected since many people know google collects data but may be naive as to the possibility that google is lying about the data being completely erased.
There's an X-files episode about this, with Morris Fletcher.