The report said Yahoo had secretly scanned millions of email accounts to help American intelligence.
Yahoo on Wednesday rejected allegations of mass email surveillance amid an outcry from privacy activists over a report that it created a special scanning program at the behest of US intelligence.
The report, which said the US internet giant had secretly scanned hundreds of millions of email accounts to help American intelligence, was "misleading," Yahoo said in a statement.
"We narrowly interpret every government request for user data to minimize disclosure," the company said in a statement to AFP. "The mail scanning described in the article does not exist on our systems."
A report Tuesday by Reuters news agency, citing former employees of the internet firm as sources, said Yahoo had built a custom program in 2015 which scanned all its emails to help the National Security Agency (NSA) and the FBI.
According to the Reuters account, Yahoo's top security officer had been unaware of the program and quit after learning that the company had complied with the request.
The Office of the Director of National Intelligence, which oversees the NSA, did not respond directly to the report but said in a statement it does not comment on "specific techniques" to gather intelligence.
The statement echoed earlier remarks from intelligence officials, saying: "The United States only uses signals intelligence for national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary people."
Privacy 'bombshell'?The report was described by some activists as a "bombshell" which could, if proven true, reveal a new level of surveillance by the National Security Agency, which was roiled by disclosures in 2013 by former contractor Edward Snowden.
"There's still much that we don't know at this point, but if the report is accurate, it represents a new -- and dangerous -- expansion of the government's mass surveillance techniques," the Electronic Frontier Foundation said in a statement.
Patrick Toomey, a staff attorney with the American Civil Liberties Union, said: "Based on this report, the order issued to Yahoo appears to be unprecedented and unconstitutional."
Toomey added that the government "appears to have compelled Yahoo to conduct precisely the type of general, suspicionless search that the (US Constitution's) Fourth Amendment was intended to prohibit."
Bruce Schneier, a cryptographer and fellow at the Berkman Klein Center for Internet & Society who has clashed with the NSA over surveillance, said he was not surprised by the latest claims.
"The NSA is spying on the internet, they use different techniques," Schneier told AFP.
The report nonetheless would be at odds with Yahoo's transparency report which claimed it received a relatively small number of US government requests in 2015.
Yahoo also backed Apple's effort to challenge a US government effort to force the iPhone maker to build a program to help decrypt a handset used by one of the shooters in a 2015 California shooting spree.
'Not comforting'Julian Sanchez, a fellow at the Cato Institute and critic of NSA surveillance, said his concerns were not allayed by Yahoo's statement.
"Yahoo's meticulously worded statement not terribly comforting," Sanchez said on Twitter.
"'Does not exist on our systems' sounds a hell of a lot like 'currently under this program.' DID it exist? Does it exist somewhere else?"
The Reuters report also suggested that other US tech companies may have received similar requests, but it was not immediately clear how or if other companies were involved.
Microsoft said in a statement: "We have never engaged in the secret scanning of email traffic like what has been reported today about Yahoo."
Facebook, in a statement to AFP, said it "has never received a request like the one described in these news reports from any government, and if we did we would fight it."
Twitter also denied receiving any such request.
"We've never received a request like this, and were we to receive it we'd challenge it in a court," a Twitter spokesman said.
Twitter also noted it was suing the US Justice Department "for the ability to disclose more information about government requests."
The report adds to Yahoo's woes over security and privacy, coming just weeks after it acknowledged data from some 500 million users may have been compromised by hackers in a breach in 2014.
In Europe, the Ireland-based Office of the Data Protection Commissioner said it would look into the latest allegations.
The office "is progressing its enquiries with Yahoo in relation to the breach first reported to its office on 22 September and is in iterative contact on the matters we have raised, which now includes the more recent report," a statement said.
"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."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)