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How do the likes of weTransfer deal with this problem? or any other of the free file sharing sites?

They spend money on abuse prevention, and that money comes from monetizing the service.

Exactly this. I used to work for them and the support team had a direct line to the vice department if someone had uploaded CP again. We also built a photoDNA based detection system to automatically flag and report suspect images. The thing was definitely not cheap at WeTransfer scale though.

That only works for unencrypted files though. How do these services prevent people uploading a password protected Singer_9960_Manual_Polish.zip?

We had no illusion that we could catch everything, especially if they were using proper encryption. If you can break modern encryption quickly enough to do it at 400 files per second then there are way more profitable things to do with that ability than running a file transfer service.

But even so there were several alerts per week. For comparison, we were doing around 40 million transfers per month at the time, so ~10 million per week.

Well I'm guessing that one allowed password encrypted 7z archives.

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