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Tim Cook has no clue what we do: Google's Schmidt

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Google's platform is designed to "make your life better," executive chairman Eric Schmidt told CNBC on Wednesday, dismissing claims by Apple's chief that the search giant sells personal data to advertisers.

In a world where consumers are becoming more concerned about safeguarding their data from unwarranted intrusions, Apple's Tim Cook issued a not-so-subtle broadside last week aimed at Google and Facebook.

The iPhone maker's chief said: "We don't build a profile based on your email content or web browsing habits to sell to advertisers. We don't 'monetize' the information you store on your iPhone or in iCloud. And we don't read your email or your messages to get information to market to you."

Read More Apple's Tim Cook takes a swipe at Google, Facebook

In an on CNBC's "Squawk Box," Schmidt insisted Google respects user privacy, and questioned whether Apple's chief even knew what he was talking about.

"I read this, and I thought 'is he really familiar with how Google works?'" Schmidt said.

Cook's jibe, and Schmidt's response, marked an unusual spat between the tech world's two most recognizable yet fiercely competitive brands. Eager to monetize data but fearful of turning off users, tech companies are walking a tightrope between earning ad dollars and making consumers feel their data is secure.

"We do targeted ads against Gmail, which we've done for a decade, but we don't otherwise use that information," Schmidt said, adding that "we don't do any of the other things he is implying in his message."

Google's e-mail, map and search functions are integrated "using information with your permission to make your life better," Schmidt added, "and you can turn all of that off in one click."

Google has long been suspected of mining user data for advertising purposes. Earlier this year, the search giant was accused in a lawsuit of using its email service to target ads at students.