This is pretty much a textbook case of extortion, specifically blackmail.
He made a business out of continuing to publish embarrassing and socially damaging imagery until he was paid off. Publishing the images alone would have been a grey area at the time he did it, but the extortion site is definitely illegal.
If Google started a service where they dug up dirt on people then contacted them to get a payment in order to make the problem go away, their representatives would absolutely be hauled into court. Google knows better than to try of course.