Via the Register:
Section 11.1 of the new Google Browser Chrome's EULA:
11.1 You retain copyright and any other rights that you already hold in Content that you submit, post or display on or through the Services. By submitting, posting or displaying the content, you give Google a perpetual, irrevocable, worldwide, royalty-free and non-exclusive licence to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content that you submit, post or display on or through the Services. This licence is for the sole purpose of enabling Google to display, distribute and promote the Services and may be revoked for certain Services as defined in the Additional Terms of those Services.
Not sure any of us want to grant Google a "perpetual, irrevocable, worldwide, royalty-free and non-exclusive licence to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute" any content that we "submit, post or display on or through" their new browser.
I'm sure Mr. Fraser can critique more eloquently, so I'll just quote Jon Stewart, "whaaaaaaaaaa?"
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More: in Substantive Law or Technology: Internet | from Steven Matthews

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Too bizarre to be real… Which is right, as it turns out. Google sez:
Google is "working quickly to remove language from Section 11 of the current Google Chrome terms of service. This change will apply retroactively to all users who have downloaded Google Chrome."
See Ars Technica
That does seem over the top. Not sure why it would be drafted that way, or purport to give Google those rights. After all, this is a browser. The inputs are people entering URL's they want to go to for which that doesn't seem necessary. Other inputs could be people using the browser to do searches or post content – such as this comment – but then as I see it, the browser is just a conduit for that – not unlike your ISP. Its Slaw that I am putting this on, so if anyone has to deal with any rights to publish or use this comment, its Slaw, not Google.
whaaaaaaaaaa? does seem to sum this up nicely.
Why are people so willing to believe such an absurd story?
The EULA made no sense because you weren't using Chrome to publish anything.
Now, on the other hand – if you are using blogger, you might want to rethink.
Good news Simon. :) Readwriteweb mentioned that the terms are very close to that of Google Docs, which of course browsers & web services are very different.
I have to wonder if a Google lawyer got caught with an unvetted cut & paste. The Sarah Palin of EULAs perhaps? ;)
Matt Cutts has a post on this — essentially Google's lawyers are re-writing the EULA, with retroactive effect.
Does an EULA mean anything for open-source software? The source code is provided under a BSD-style license, allowing anyone to modify the browser to meet their needs. It would be very easy to modify the source to ensure that the browser never provides any information to Google (except legitimate web searches). This modified browser can then be released and freely distributed, free of any of the conditions in the EULA, since the EULA refers to the compiled, binary download and not to modifications to the source.
Can anyone with an IP background explain how the EULA interacts with Google's BSD license? http://code.google.com/chromium/terms.html
Word from the official Google blog:
11. Content license from you
11.1 You retain copyright and any other rights you already hold in Content which you submit, post or display on or through, the Services.
Sounds good to me.
Commentators describe it as the PR backlash against EULA.