Ikea fined €1m by French court for spying on staff

Reuters

June 15, 2021: Ikea has been ordered by a French court to pay a €1m (£861,000) fine for spying on its staff, after the world’s biggest furniture retailer was found guilty of improperly gathering and storing data on its employees.

The French branch of Ingka Group, which owns most Ikea stores worldwide, was accused of snooping on its workers and some of its clients over several years.

The flatpack furniture group, which has recognised there were some improper practices, was accused of breaching employees’ privacy by reviewing records of their bank accounts and sometimes using fake employees to write up reports on staff.

Worker representatives said the information was used to target union leaders in some cases or used to Ikea’s advantage in disputes with customers, after the company trawled data on people’s finances and even on what cars they drove. It was also found to have paid for access to police files.

Prosecutors had been pushing for a €2m fine. Lawyers for France’s CGT union and several individuals seeking compensation said the final amount was not huge, but welcomed the outcome. “It’s the symbolism here that matters,” said Solene Debarre, a lawyer representing the CGT.

The company said it was reviewing the court’s decision to see if further measures were needed, after it took steps to stamp out the surveillance tactics.

“Ikea Retail France has strongly condemned the practices, apologised and implemented a major action plan to prevent this from happening again,” Ingka Group said.

Ikea employs about 10,000 people in France, its third-biggest market after Germany and the US, and has experimented there with new formats, including a store launched in 2019 in the heart of Paris.

It is best known for its vast self-service stores out of town but many shoppers have shifted online, particularly during the pandemic when demand for office furniture, food jars and cookware grew strongly.

Ingka’s operating profit fell in the year to the end of August 2020, hurt by store closures during the coronavirus crisis, though it has projected a rebound. Its former chief executive in France Jean-Louis Baillot was found guilty in the case and handed a two-year suspended prison sentence. Judges fined him €50,000 for storing personal data.

The allegations centred on the period 2009-12, although prosecutors said the spying tactics began in the early 2000s.

Fifteen people faced accusations in the trial. Two of the accused were found not guilty of all charges against them, including a police officer, and Stefan Vanoverbeke, who ran Ikea in France from 2010-15 and still holds a senior position in the group’s retail operations.

Others were cleared of some charges, such as systematically divulging confidential information, but found guilty of others, including illegally obtaining personal data. Sanctions ranged from a €5,000 fine for a former human resources manager, to several suspended prison sentences.

Ikea fired several managers and overhauled its internal policy after the allegations came to light in 2012. The Swedish firm has long denied setting up a widespread espionage system, and was absolved on Tuesday of systematically violating personal data.

Ikea operates through a franchise system. Ingka Group is the main franchisee to the brand owner, Inter Ikea Group.