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In response to user concerns, Dropbox has rewritten the questionable part of its Terms of Service. Now, the Terms of Service reads:
…By using our Services you provide us with information, files, and folders that you submit to Dropbox (together, "your stuff"). You retain full ownership to your stuff. We don't claim any ownership to any of it. These Terms do not grant us any rights to your stuff or intellectual property except for the limited rights that are needed to run the Services, as explained below.
We may need your permission to do things you ask us to do with your stuff, for example, hosting your files, or sharing them at your direction. This includes product features visible to you, for example, image thumbnails or document previews. It also includes design choices we make to technically administer our Services, for example, how we redundantly backup data to keep it safe. You give us the permissions we need to do those things solely to provide the Services. This permission also extends to trusted third parties we work with to provide the Services, for example Amazon, which provides our storage space (again, only to provide the Services).
Dropbox's cloud data ownership misstep came on the heels of an authentication bug that left Dropbox users' accounts wide open and accessible by any password. The security lapse also prompted one Dropbox user to file a class action lawsuit against the cloud storage provider.