If you thought you were free to use all of that spacious SkyDrive storage for anything you want, think again - Microsoft is watching, even if you're using a private folder. A Dutch user learned that the hard way, when Microsoft blocked his account and basically made his Xbox, Windows Phone and Hotmail account useless.
The user, who goes by WingsofFury, discovered that his Microsoft account had been blocked without warning, and he hasn't been able to get a straight answer out of Microsoft as to exactly how he broke the EULA (that's his story, at least). He claims that all of his SkyDrive files were stored in private folders, meaning that no one but him (and Microsoft, apparently) could access them.
Assuming that everything went down as WingsofFury claims - and since there's really no way to investigate it, we can't confirm that it did -, then this would put Microsoft's practices in stark contrast with those of competitors like Dropbox. And while on one hand we can't argue with Microsoft trying to keep SkyDrive from becoming another Megaupload, it seems like what someone decides to store as a private file should be, well, private.
Take Dropbox, for example. According to their terms of service, anything that isn't specifically marked as public is encrypted, and cannot be viewed by anyone, including Dropbox staff, other than the user. Only the metadata of those files, like the name of the file, is visible to Dropbox staff, and they will only access that data when specifically requested to do so by law enforcement. Theoretically, unless you're using Dropbox for nefarious purposes, your files are your business, no matter what they are, since no one is going to request a takedown of something they don't know about.
We really love SkyDrive, but incidents like this are enough to make anyone think twice about cloud storage. On the other hand, without hearing Microsoft's side of the story, we really can't be sure that anyone is as innocent as they claim.
As SkyDrive becomes even more deeply embedded in Windows thanks to Windows 8 and upcoming services like SkyDrive Pro, it's going to be easier than ever for users to accidentally upload forbidden content to the cloud, and if things really are as WingsofFury claims, we really hope that Microsoft adjusts their policy in the future to take their user's privacy, one of their greatest assets against Google, into greater account. At any rate, it'll definitely give the cloud haters something to talk about.
WMPoweruser points out that this isn't the first time that Microsoft has blocked someone's Microsoft Account over what they put in their SkyDrive. Back in February, a German photographer was booted from the service after he stored four partially nude photos in a private folder.