According to Michael Horowitz of ComputerWorld, Android's feature that allows you to back-up your settings -- including WiFi password -- to Google's servers, means that "it is likely that Google can access most Wi-Fi passwords worldwide".
Many (probably most) of these Android phones and tablets are phoning home to Google, backing up Wi-Fi passwords along with other assorted settings. And, although they have never said so directly, it is obvious that Google can read the passwords.
Sounds like a James Bond movie.
Android devices have defaulted to coughing up Wi-Fi passwords since version 2.2. And, since the feature is presented as a good thing, most people wouldn't change it. I suspect that many Android users have never even seen the configuration option controlling this. After all, there are dozens and dozens of system settings to configure.
And, anyone who does run across the setting can not hope to understand the privacy implication. I certainly did not.
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