Dropbox is a file backup, synchronization, and sharing service enabling users to store their photos, documents, and other files "in the cloud." Dropbox's software automatically backs up files from user-specified directories onto the company's servers. These files and folders can be synchronized between multiple computers and shared with other users. Dropbox has 25 million users and 200 million files are "saved" using the service each day. Dropbox provides 2GB of storage space to its customers for free. Consumers can purchase additional storage space, by signing up for one of two "Pro" service plans, offering 50GB for $9.99/month or $99.00/year, and 100GB for $19.99/month or $199.00/year. According to a complaint filed by a privacy advocate with the FTC, Dropbox claims on its website that "Your files are always safe," "All files are encrypted," and "Nobody can see your private files in Dropbox unless you deliberately invite them or put them in your Public folder." According to Christopher Soghoian, the privacy advocate, Dropbox's service does not provide strong security, it has inadequate disclosures regarding the encryption of consumer files, and consumers have thus been misled. According to Soghoian, Dropbox is also making misleading statements about encryption to give it an unfair advantage over competing services. Dropbox has defended its practices, and has pointed consumers to its privacy policy where it indicates that it has made clear disclosures about its security practices.

TIP: It is unclear if the FTC will take action or investigate Dropbox. This complaint to the FTC does serve as a reminder, however, that as consumers – and consumer advocates – become increasingly skeptical about corporate security claims, companies should take care when drafting advertising copy relating to security practices.