I see a lot of comments misinterpreting this. First, it's not about private files, it's about distributing content. Google isn't spying on your private files, but does scan them when you share them publicly. E.g. keep all the pirated movies you want on your Drive, and even give private access to friends, but the moment you make them publicly viewable Google scans them and limits access accordingly. So no, this isn't…
> After we are notified of a potential policy violation, we may review the content and take action…
So (1) it's not about Google proactively scanning all your files (even public ones: though I guess with sufficiently public files, sooner or later someone will click on "Report Abuse", perhaps even by accident), and (2) I imagine it could happen with files you shared with just your friend, if your "friend" decides to "Report Abuse".
(Disclaimer: I work at Google but not on Google Drive or anything related to these policies.)