So just to clarify, because a different company, in a different industry, did something illegal that had nothing to do with privacy, you don't trust privacy policies?

Yes, pretty much this.

That scandal has shown that self-policing doesn't work if all the incentives point into the opposite direction. I don't see what significant differences at Google would make them immune to the forces that were at work at VW.

I think there's a very simple one: google employees, by and large, use google products. If google is mishandling user data, that means that they are mishandling my data, and my boss's data, and my boss's boss's data.

That is, unlike with VW vehicles, individual employees are directly negatively affected.