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…
> All our legal protections ultimately depend on a democratic foundation
is the wrong way round. I suspect you're speaking from a US perspective. The US constitution limits the rights of goverment for the benefit of the people, it does not limit the rights of the people for the benefit of government.