Overview

• IKEA operates through a franchise system. Ingka Group is the main franchisee to brand owner Inter IKEA Group.
• 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.
• IKEA employs around 10,000 people in France, its third-biggest market after Germany and the United States.

The Decision

• The Swedish furniture retailer was directed on Tuesday to pay 1 million euros, or $1.2 million, by a French court.
• 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 centered 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.

What did IKEA do?

• Review records of employee bank accounts.
• Used fake employees to write up staff reports.
• Target union leaders in some cases. 
• Use the info to IKEA’s advantage in disputes with customers.

IKEA’s Response

•  IKEA Retail France has strongly condemned the practices, apologized, and implemented a major action plan to prevent this from happening again.
• The company said it was reviewing the court decision to see if further measures were needed after it took steps to stamp out the surveillance tactics.
• The Ingka Group said it was reviewing the decision to determine whether protocol changes were needed following other steps to end the surveillance.

Privacy Team Analysis

• The sanctions on IKEA and some of its former executives will serve as an example and will dissuade companies from spying on their employees and union representatives in the future.
• IKEA was accused of trawling through employees’ data to check up on their finances and personal lives. It has recognized some of these tactics, although it has denied setting up a widespread espionage system.
• IKEA had fired several managers and overhauled its internal policy after the allegations came to light in 2012 which shows a willingness to do the right thing on the company’s part.
• IKEA’s new privacy-related video is a step in the right direction assuming (of course), they are going to follow through and be strict about implementing the changes they mention in the video.