European Union privacy watchdogs are concerned by reports that Yahoo has been secretly scanning its users' email at the request of U.S. intelligence services.

"It goes far beyond what is acceptable," said Johannes Caspar, Commissioner for Data Protection and Freedom of Information in Hamburg, Germany.

Reuters reported on Tuesday that Yahoo had built a system for U.S. government agencies to search all of its users' incoming emails. Other tech companies were quick to distance themselves, saying they would have challenged any such request in court.

Yahoo later described that report as misleading, without saying what exactly did happen.

On Wednesday, the New York Times attempted to clarify the matter with a report that Yahoo had modified an existing system, designed to identify spam, malware and child pornography, so as to also search for code of interest to the FBI. The modification was made at the request of the U.S. Department of Justice, the newspaper reported.

Yahoo declined to comment on the new report.

Caspar, one of the more outspoken of Germany's regional data protection commissioners, pointed out that, thanks to former National Security Agency contractor Edward Snowden's revelations, we've known for some time that big U.S. internet companies were obliged to give their user data to the country's security services.

"The suspicion that Yahoo has actively assisted to scan mails of their users as a henchman of the NSA is not really surprising regarding the information of the PRISM program. On the other hand it goes far beyond what is acceptable," Caspar said.

He wants to know what really happened at Yahoo, too.

"There has to be a clear and fast examination of these allegations by the competent data protection authority," he said.

The competent authority for investigating Yahoo, in the EU at least, is the Irish Data Protection Commissioner. That's because EU privacy law allows multinationals to designate one country as home for their European operations, and Yahoo has chosen to incorporate its EU service company in Ireland.

The Office of the Data Protection Commissioner in Ireland has raised the reports of email scanning with Yahoo as part of its ongoing investigation into the privacy implications of the giant data breach reported by the company last month, a representative said Wednesday.

"Any form of mass surveillance infringing on the fundamental privacy rights of EU citizens would be viewed as a matter of considerable concern by this Office," the representative said via email.