They take the ads, and distribute them to their users based on user taste that's their secret sauce. Giving user data to advertisers would be giving away their secrets I think.
They sell targeted ads, they do not sell customers' data to advertisers. i.e. Advertisers get to advertise on Google's platforms, but they do not get access to Customer data.
I gather there are some questions around the strength of its app sandboxing as well, but I can't speak to that at all. Perhaps someone better informed will do so.
I'm an Android dev and to me the biggest problem with Android from every aspect (development, security, monetization) is how poorly new versions of Android are supported on devices.
Apple's dig at Android 7 usage vs iOS 10 usage was spot on.