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Google's Android smartphone operating system has been associated with Carrier IQ after a hacking expert released a video on YouTube showing his Android-powered HTC running the software.
Schmidt said: "Android is an open platform, so it's possible for people to build software that's actually not very good for you, and this appears to be one."
"It's a key-logger, and it actually does keep your keystrokes, and we certainly don't work with them and we certainly don't support it," he told an Internet freedom conference in the Dutch city of The Hague.