Police routinely seek broad cell phone location data to identify potential suspects – if a phone’s location history puts someone in the neighborhood of a crime, then the phone’s owner is considered a suspect. Thus, the police request Google to turn over the records of all phones, including those of innocent people to see if they were in the neighborhood.

Apparently Google retains your phone’s location history (which Google collects even if you turn off Location on the phone) forever.

Sensorvault, according to Google employees, includes detailed location records involving at least hundreds of millions of devices worldwide and dating back nearly a decade.

Source: Tracking Phones, Google Is a Dragnet for the Police – The New York Times

The purpose of Android is to provide a 24×7 surveillance network for data collection by Google.