French court ordered IKEA to pay a fine of €1m and to convict the former chief executive of its French business for orchestrating a large-scale espionage operation that trapped employees.
A Versailles criminal court ruled on Tuesday that Ikea used private investigators and “fraudulent methods” to search for information on employees and job applicants between 2009 and 2012, according to AFP.
Prosecutors were seeking a €2 million fine against the world’s largest furniture retailer, owned by the Ingka Group, as well as a prison sentence for the former CEO of the French subsidiary, Jean-Louis Bailot.
Bailo, who was at the helm of Ikea France from 1996 to 2009, was convicted and given a two-year suspended prison sentence plus a fine of 50,000 euros.
“Mr Bailu was deeply shocked by this ruling,” said the lawyer for the former CEO, Francois Saint-Pierre. “He denies he gave instructions to spy on IKEA employees, and plans to appeal.”
The case has generated a lot of public interest in France, although it focuses on events a decade ago, as it fuels current tensions between employers and unions and concern over the misuse of personal data and privacy rights.
The scandal surfaced in 2012, when police raided the French headquarters of IKEA in Yvelines near Versailles. Officials confiscated documents and checked computers after opening a preliminary judicial investigation into allegations of illegal surveillance by members of two union groups.
On Tuesday, the court found that the administration used a private security company, Eirpace, to illegally obtain police records and collect personal data.
In addition to the two-year suspended prison sentence that Bayo received, Jean-François Paris, who was the head of the risk department and carried out mass checks on employees at IKEA France from 2002 to 2012, was given an 18-month suspended prison sentence and fined 10,000 euros, According to Agence France-Presse.
Critics said at the time that Ikea’s secret culture had been strained by the rapid expansion into new countries. The company also faced a bribery scandal in Russia around the same time as its problems in France.
But it has continued to open up over the past decade, giving insight into its business and balance sheet, revealing its earnings for the first time in 2010 and explaining more about its complex organizational structure.
Following the ruling on Tuesday morning, Ikea France said it had “apologised for this situation which seriously hurt the company’s values and ethical standards” and that it “strongly condemns the practices of its former employees”.
This article has been corrected to state that Jean-Louis Bailot was CEO of Ikea France from 1996 to 2009