Google updated their Terms of Service agreement on April 14, 2014, to add the following sentences (among other changes):
Our automated systems analyze your content (including emails) to provide you personally relevant product features, such as customized search results, tailored advertising, and spam and malware detection. This analysis occurs as the content is sent, received, and when it is stored.
Google apparently made this change in response to a lawsuit filed against the company alleging that they violate privacy laws by scanning the contents of e-mails to provide targeted ads to Gmail users. This change to their Terms of Service agreement clarifies what Google does. For more details read these Ars Technica articles from April 15, 2014, and September 27, 2013.
Microsoft, on the other hand, issued a statement on March 20, 2014, that they are strengthening their policies to protect the privacy of e-mail contents (although their Terms of Service agreement and Online Privacy Statement have not changed). As described in a March 21, 2014, article by Fahmida Y. Rashid on PCMag.com, this change in Microsoft’s policy comes in response to complaints about an incident in which Microsoft read the contents of a Hotmail user’s e-mails without notifying the user or obtaining a court order. Microsoft’s March 20, 2014, statement affirms that “Outlook and Hotmail email are and should be private” and that Microsoft “will not conduct a search of customer email and other services unless the circumstances would justify a court order, if one were available.”