Google have always been selling advertising first and foremost. Their pitch is "we will put you in front of the right people".
Facebook, an other social network providers, seem to have modernised this badly. The social graph and access to it was the key offering, so their pitch was "we will give you access to the right people".
How did it go on like that for so long? There were four sets of entities involved who for their own reasons did nothing:
1. Those buying the access knew the difference and eagerly lapped up as much as they could.
2. The general public was blissfully unaware until the recent furore so there was no push to change anything from that side. To quite an extent, IMO, many were not just unaware but deliberately ignorant - many of us, techies like myself and active members of privacy groups, were aware and talking loudly about the issues but the majority didn't care because they didn't see how it might significantly affect them personally.
3. Commercial entities, even direct competitors, said nothing because they thought it better to try take a piece of the pie for themselves instead of sprinkling laxatives over someone else's and risk the pie shop being closed down. They are of course right now either being investigated too, or hurriedly making sure they were not (or that it can not be proven that they were) directly and knowingly culpable of the same things.
4. While there was no public or commercial push against what facebook and others were doing, the politicians had no interest. No point siring up potential commercial sponsors for their future funding drives unnecessarily...
Maybe they didn't, but it's not like we know exactly what Google is doing with data.