What TOS says about copyrights infringement. I have seen people have created ebooks/music sites and displaying google ads. There is something in TOS that you can't show ads where no content is available. But what if people using asense on ebooks site, where books are available, breaching copyrights laws. Is it OK? I don't think so, what do you think. Does google restrict you from doing this while using adsense program or it doesn't care what you are doing?
"In order to avoid associations with copyright claims, website publishers may not display Google ads on web pages with MP3, Video, News Groups, and Image Results." Under prohibited content: "Any other content that promotes illegal activity or infringes on the legal rights of others"
To interpret the TOS clauses that The Critic quoted, it is a violation of Google's policies to place AdSense ads on or in conjunction to any content that violates the copyrights of someone else. So placing AdSense on sites the breach other people's copyrights is not allowed.