The Android OS has access to all of your files on your device and is controlled by Google. It is more likely than not that your files are being collected and disseminated directly on your device or through Google Drive. Of course, this would be an "automated" system and no human has access to your files or some similar nonsense.
Yes, the OS does by nature of design, but there is no conspiracy. Google doesn't have access to your data (and your phone isn't doing any image processing on behalf of Google) unless you explicitly allow it or fail to opt-out of targeted advertising.
Tighten your security settings, use a browser/plug-in such as
Ghostery and be careful what you post online or in the cloud.
I run Android and it can be one of the most secure mobile OS's out there... if you know what you're doing.