Google complies with legal law enforcement requests, Schmidt said, and retains user data for a year because of government mandates.
Julian Sanchez, a senior fellow at Cato, asked if Google has incentives to lock down data when much of its business model is collecting user data.
People criticizing the company's privacy efforts "don't understand how Google works," Schmidt said. "Google's job is build stuff that delights customers. When governments illegally invade their privacy, that's like a negative. It's easy to understand why we'd make these systems stronger."
Timberg asked Google about a recent push by the FBI and U.S. Department of Justice to build back doors in encrypted services as a way to fight crime. The recent requests came after announcements from Apple and Google of new encryption tools for mobile phones.
Back doors are a bad idea, Schmidt said. "It'd be great, if you're the government, to have a trap door, but how do we at Google know that the other governments are not taking over the trap door from you?" he said.
Law enforcement officials have "so many ways" to investigate crime without requiring tech companies to build back doors into products, Schmidt said.
In an earlier panel at the Cato forum, Soghoian said the U.S. public should be as concerned about surveillance by local police as it is about surveillance by the NSA.
Big-data tools created for intelligence agencies, including metadata collection programs, are "trickling down to state and local law enforcement agencies," he said. "It's simply not appropriate for local law enforcement to have intelligence community-grade surveillance technology, because these devices do not respect the privacy of innocent Americans."
Sign up for CIO Asia eNewsletters.