No, they did not. That was erroneous reporting by the Telegraph that a lot of outlets copied [0].
The correction:
> This story originally said Apple screens photos when they are uploaded to iCloud, Apple’s cloud storage service. Ms Horvath and Apple’s disclaimer did not mention iCloud, and the company has not specified how it screens material, saying this information could help criminals.
And from the interview with TechCrunch:
> This is an area we’ve been looking at for some time, including current state of the art techniques which mostly involves scanning through entire contents of users’ libraries on cloud services that — as you point out — isn’t something that we’ve ever done; to look through users’ iCloud Photos.
The correction:
> This story originally said Apple screens photos when they are uploaded to iCloud, Apple’s cloud storage service. Ms Horvath and Apple’s disclaimer did not mention iCloud, and the company has not specified how it screens material, saying this information could help criminals.
And from the interview with TechCrunch:
> This is an area we’ve been looking at for some time, including current state of the art techniques which mostly involves scanning through entire contents of users’ libraries on cloud services that — as you point out — isn’t something that we’ve ever done; to look through users’ iCloud Photos.
[0] https://www.telegraph.co.uk/technology/2020/01/08/apple-scan...