As found on cnet:
Google has begun experimenting with encrypting Google Drive files, a privacy-protective move that could curb attempts by the U.S. and other governments to gain access to users' stored files.
Two sources told CNET that the Mountain View, Calif.-based company is actively testing encryption to armor files on its cloud-based file storage and synchronization service. One source who is familiar with the project said a small percentage of Google Drive files is currently encrypted.
The move could differentiate Google from other Silicon Valley companies that have been the subject of ongoing scrutiny after classified National Security Agency slides revealed the existence of government computer software named PRISM. The utility collates data that the companies are required to provide under the Foreign Intelligence Surveillance Act -- unless, crucially, it's encrypted and the government doesn't possess the key.
"Mechanisms like this could give people more confidence and allow them to start backing up potentially their whole device," said Seth Schoen, senior staff technologist at the Electronic Frontier Foundation in San Francisco.
Major Web companies routinely use encryption, such as HTTPS, to protect the confidentiality of users' communications while they're being transmitted. But it's less common to see files encrypted while stored in the cloud, in part because of the additional computing expense and complexity and the difficulties in indexing and searching encrypted data.
Google previously had said that user files were transmitted in encrypted form, but stored in its data centers in an unencrypted manner, as detailed in an April 2012 post on a Google product forum from a community manager.
Jay Nancarrow, a Google spokesman, declined to answer questions about Google Drive encryption.
Secure encryption of users' private files means that Google would not be able to divulge the contents of stored communications even if NSA submitted a legal order under the Foreign Intelligence Surveillance Act or if police obtained a search warrant for domestic law enforcement purposes.
Read the entire article on cnet.