It is no secret that online privacy is quickly dissolving. Some of this has been care of the general nature of companies like Facebook, whose platforms are based around you giving someone else your personal information for public consumption. More recently, however, some of the big tech companies have been getting involved with the government to not only invade your privacy but to violate the 4th Amendment of the US Constitution.
One of the most notorious violators of privacy has been Google, according to EPIC (not EPIC Games) the Electronic Privacy Information Center, a civil liberty group in Washington DC. They have filed an amicus brief in a case involving Google's practice of scanning files that you upload to the company's servers, looking for specific content that the government has asked them to look for. When they find the content in question, they report it to law enforcement, essentially circumventing the 4th Amendment, which protects citizens against search and seizure.
Obviously, this gets into some really sticky legal ground. Google is a private entity that is not directly bound by the 4th Amendment. Their terms of service could say that they look at every file and search for illegal content and report any violations to law enforcement, and that would technically be fine, though would still cause civil liberty issues. But, a voluntary search of hashes could legally protect their actions.
However, the fact that Google is working directly with law enforcement, and searching on matches and no longer just hashes, for what is deemed illegal activity makes them a partner of law enforcement, not just a private entity. It is similar to being a law enforcement contractor, which could bind them to the rules and regulations against law enforcement.
The biggest issue in question here, above and beyond possible Constitutional violations, is a lack of information about the validity of the system. How often does Google refer innocent people to law enforcement? Has anyone lost their job because Google has inaccurately accused them of trafficking in illegal content? Neither Google not law enforcement agencies have released any information on these statistics. A little transparency of any kind might help them defend their actions, unless they often fail, in which case it could hurt their image even more. Either way, transparency is essential in this kind of questionable behavior.