What area are you in?
Check your county development plan. If you live within an urban boundary, then your county development plan more that likely will state something about screening between properties for privacy.
Also are you sure that its exempted development. If the extension is on the ground floor, then it can be 40 sq meters. If it is on an upper floor, I think there is a cap at 12 sq meters! If they have also built a seperate garage, not attached to the house then the limit for exempted development is around 25 sq meters and the elevated extension may not be therefore exempted. i.e. if you have used up your exempted allowence, you don't get more!
Write to the local authority asking for clarification that the development carried out was in fact exempted!