Dropbox will react to DMCA notices and "will take whatever action, in its sole discretion, it deems appropriate, including removal of the challenged content from the Site."

http://www.dropbox.com/terms#dmca

As they will probably never receive a DMCA notice for your private folders they won't delete anything. (My opinion, I'm not associated with Dropbox)

edit: replaced provide with private

I'm sure they must have received DCMA notices for infringing files people host in their publicly shared folders.

I'm guessing the guy put his mp3 files in his public folder which is as good as sharing them on the web.

The music thing is not true. Many people use dropbox to dunce their iTunes library. (I do) and that's just crazy talk.

It's for people who are backing up their music, and then sharing publicly. Private backups shouldn't be effected.

Well, backups of your torrented music are obviously not fair use, and doesn't Dropbox have a "public" folder or something?

That said, yes, I'd expect them to stay out of my data unless I do something silly like using them as a distribution mechanism.

> backups of your torrented music are obviously not fair use

Obviously, but how can Dropbox tell if the files are torrented or were purchased legally without DRM? Or legally ripped from a CD for a backup?

I think watermarking - inserting a few nearly-inaudible bits in a song/whatever to identify the owner - is becoming more and more common. To name just one example.

That said, I don't think Dropbox should care.

They probably dont care if they are torrented or not, they likely care if they are made public.