Yahoo looks set to attract a privacy audit from the Irish Data Protection Commissioner after informing the watchdog that it is moving all of its data-processing facilities from Europe to Ireland.
The internet giant, which is currently struggling with falling sales, also informed its European customers that it was increasing its Dublin workforce a year after it said that it would add 200 jobs to its Dublin facility.
Data Protection Commissioner Billy Hawkes said it is his office's policy to audit all internet firms that use Ireland as a base to process personal information. His office is in the final stages of an audit on Dublin-based LinkedIn, to be followed by an audit of Cork-based Apple.
"Yahoo has been in touch with the Office of the Data Protection Commissioner regarding its transfer of services and operations to its Irish entity," said a spokesman for the Data Protection Commissioner.
"This will bring it under Irish data protection legislation and the Office of the Data Protection Commissioner will have responsibility for ensuring compliance with the legislation."
Mr Hawkes has recently been critical of public sector bodies in relation to their handling of citizens' personal data. He singled out the Department of Social Protection as being sub-standard for protecting individuals' personal information.
The Yahoo move means that its terms of service for Yahoo email, Flickr (photo service) and other Yahoo services have changed. The company said that its change of service terms meant that paying customers could cancel their accounts and receive refunds, if they wished.
"To encourage more collaboration and innovation, we're increasing our headcount in Dublin," said the customer notice from Yahoo. "Dublin is already the European home to many of the world's leading global technology brands and has been a home for Yahoo for over a decade already."
Yahoo employs around 275 people in Dublin. Last week, it reported a quarterly decline in revenue of 6pc, marking the fourth successive quarter of revenue falls. The company, which saw some of its sharpest sales declines in Europe, is heavily dependent on advertising.
The company's chief executive, Marissa Mayer, has recently moved to build new areas of business for Yahoo, including a new media content business with celebrity news personalities, including former NBC newscaster Katie Couric.