IKEA found guilty of setting up an elaborate system to illegally spy on hundreds of employees and job applicants over several years, using private detectives as well as police sources.
A French court has ordered IKEA to pay a $1.2 million fine for spying on its French staff after the world’s biggest furniture retailer was found guilty of improperly gathering and storing data on its employees.
The company said it was reviewing the court decision on Tuesday 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," the Ingka group said.
The French branch of Ingka Group, which owns most IKEA stores worldwide, was accused of snooping on its workers and some 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 firm trawled data on people's finances and even what cars they drove. It was also found to have paid for access to police files.
Prosecutors had been pushing for a 2 million euro fine. Lawyers for France's CGT union and several individuals seeking compensation said the final amount was not hefty, but welcomed the outcome.
"It's the symbolism here that matters," said Solene Debarre, a lawyer representing the CGT.
IKEA employs around 10,000 people in France, its third biggest market after Germany and the United States, and has experimented with new formats there, 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 lockdowns when demand for office furniture, food jars and cooking products grew strongly.
The Ingka group's operating profit in the year to the end of August 2020 fell, hurt by store closures during the coronavirus crisis, though it has projected a rebound.
The firm's 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 euros for storing personal data.
The allegations centred on the 2009-2012 period, although prosecutors said the spying tactics began in the early 2000s.
In total 15 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 to 2015 and still has a senior position in the group's retail operations.
Others were cleared on some charges, such as systematically divulging confidential information, but found guilty of others, including illegally obtaining personal data.
Sanctions ranged from a 5,000 euro 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 brand owner Inter IKEA Group.