Google says that Gmail users consented to scanning and practice is part of the normal delivery process

Google has updated its Terms of Service (TOS) to fully disclose to users that their incoming and outgoing emails are automatically analyzed using software. The software is analyzing the emails to create targeted ads that can be served to the user.
Google's TOS reveal that emails are scanned when they are stored on Google services and when in transit.
Google is currently fighting in court on allegations of violating the privacy of hundreds of millions of users. Courts in the U.S. decided last month not to combine several suits into a class action against Google.

Some Gmail users believe that Google is violating state and federal laws with its email scanning practices. Google continues to argue that users of Gmail consented to the activity and that it is part of the normal email delivery process.
The update terms of service spell this out more specifically. The new update reads:
Our automated systems analyze your content (including emails) to provide you personally relevant product features, such as customized search results, tailored advertising, and spam and malware detection. This analysis occurs as the content is sent, received, and when it is stored.
Google spokesman Matt Kallman said Google's changes, "will give people even greater clarity and are based on feedback we've received over the last few months."

Sources: Reuters, Google

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