For those that didnt read other articles on this The hosting is done by a third party and offered through Verizon, they use de-dup tech and in the process scan for known child porn via hashes and other comparisons.
The de-dup tech saves them huge amounts of space so that don't have to host the same sets of common files a million times.
The TOS says they can scan. Failure to read is not Verizon's fault.
Always use encryption.