Google filing says Gmail users have no expectation of privacy - CNET
Google goes on to say that courts have held that all e-mail users "necessarily give implied consent to the automated processing of their emails."
This claim applies not only to gmail but to all email, the sending of which is about as private as sending a postcard by snail. In practice, there's so much email in the system and so few people who actually want to read it that it's safe enough to handle everyday info, but if your message includes something of high importance that somebody else might want very much to read (ahem, politicians), your only safe option is to encrypt.
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