As magicalist points out in his response, you are taking Schmidt's quote completely out of context. Don't feel bad, you're not the only one.

Schmidt (and Google) are extremely pro-privacy and against sharing information with the government. Google must have like ten lawsuits going on at all times on the entire planet trying to fight intrusive data request from governments. They spend hundreds of millions of dollars every year to prevent governments from gaining access to their data.

At least with Android being open source, they have a reasonable track record of transparency (obviously, that doesn't apply to their search logs, which are still proprietary).