Dropbox, a provider of cloud-based data storage services, is in hot water with the Federal Trade Commission over claims that it lied and intentionally deceived customers into believing that their data is more private and secure than it really is. Whether Dropbox was deliberately misleading, or just failed to clearly communicate policy changes, the complaint filed with the FTC illustrates concerns over online data security.At issue are Dropbox's terms of service. Previously, the company stated in its terms of service that "all files stored on Dropbox servers are encrypted (AES-256) and are inaccessible without your account password." But, Dropbox has continued to modify the terms of service, and backpedal on exactly how secure customer data is--sometimes putting its foot in its proverbial mouth.After a few amendments, the terms have been altered such that it now reads more to the effect that Dropbox can access and view your encrypted data, and it might do so to share information with law enforcement if it is compelled, but that employees are prohibited from abusing that power and viewing customer data.According to encryption expert Vormetric, the root of the Dropbox scenario is that the keys used to encrypt and decrypt files are in the hands of Dropbox, not stored on each user's machine. While Dropbox might have policies prohibiting Dropbox employees from viewing files, a rogue employee could view customer data using the keys held by Dropbox.Aaron Levie, co-founder and CEO of Dropbox rival Box.net, is a class act. Rather than take advantage of the situation to kick Dropbox while it's down, Levie gives his cloud competitor the benefit of the doubt. "I think Dropbox has its users' best interests at heart, but probably went a bit too far in the messaging. I believe they will rectify this."Levie did, however, stress the importance of data security as well. "Broadly speaking though, security must be of critical importance to any cloud service, and businesses should be absolutely certain they can trust their provider--things like SAS 70 Type II certification, encryption in transit and at rest, and extensive security controls for users and IT should all be top of mind for enterprises looking to leverage the cloud."Dropbox is a popular online data storage service with over 25 million users. I tend to side with Levie and assume that Dropbox doesn't have any insidious or malicious ulterior motives. It seems that Dropbox has perhaps been too fickle in trying to adapt its service and features to improve performance and meet address concerns, but I doubt Dropbox meant any harm.That said, employees don't always follow policies, and the fact that customers might believe their data is impenetrable while Dropbox employees can actually view it at will is more than a little problem.