Privacy International's (PI) research into privacy practises at internet service companies put Google in last place.
However, the search giant hit back by briefing journalists that PI was in the pocket of Microsoft.
The figures are a preliminary view, with the full research due to be released in September.
Results are colour-coded from green, "privacy-friendly and privacy enhancing", to black, which describes companies as having "comprehensive consumer surveillance and entrenched hostility to privacy". Only Google acheived the black ranking.
Also on the list was Microsoft, which was accused of "serious lapses" around Windows Genuine Advantage and Passport. AOL, Apple, Facebook, Hi5, and Reunion.com were all labelled red, posing a "substantial threat" to users' privacy. Other companies on the list include eBay, Friendster, LiveJournal, MySpace, Orkut, Skype, and Wikipedia.
A blog from one Google staffer noted that the search giant was not credited for refusing to hand over user data to the US government, that it didn't leak users' search queries like AOL had, and that it now promises to anonymise search queries after 18 months.
The row might have disappeared over the weekend, but Privacy International claimed Google was besmirching its good name.
In an open letter to Google's CEO Eric Schmidt, Privacy International accused the search giant of launching a smear campaign. PI said: "Two European journalists have independently told us that Google representatives have contacted them with the claim that 'Privacy International has a conflict of interest regarding Microsoft'."
The letter said no company had made a similar accusation in the 17 years Privacy International has existed.
The letter accuses Google of naming a member of PI's 70 strong advisory panel as a Microsoft employee. Simon Davies, of PI, said the person in question had worked for PI for six years and was described as "an exceptionally skilled IT and security expert".
Furthermore, the letter said: "He is a decent, skilled, and honourable man who upon his appointment with Microsoft offered us his resignation. We refused to accept it, and he continues to serve on the board in a private capacity."
The letter ends: "I believe an apology from you is in order, but if you cannot deliver this then I think you should reflect carefully on the actions of your representatives before embarking on what I believe amounts to a smear campaign. As with Microsoft, eBay and any other organisation we are more than happy to work with you to help resolve the many privacy challenges for Google that our report has highlighted."
Privacy International looked at 23 companies and measured 20 parameters, such as whether a company had a privacy department, what kinds of information it collects, and how data is retained.