Ikea fined 1.1 million euros over spying campaign in France

VERSAILLES, France -

A French court ordered home furnishings giant Ikea to pay some 1.1 million euros (US$1.3 million) in fines and damages Tuesday over a campaign to spy on union representatives, employees and some unhappy customers in France.

Two former Ikea France executives were convicted and fined over the scheme and given suspended prison sentences. Among the other 13 defendants in the high-profile trial, some were acquitted and others given suspended sentences.

Adel Amara, a former Ikea employee who helped expose the wrongdoing, called the ruling "a big step in defence of the citizen....It makes me glad that there is justice in France."

The panel of judges at the Versailles court found that between 2009 and 2012, Ikea's French subsidiary used espionage to sift out trouble-makers in the employee ranks and to profile squabbling customers.

Ikea France was convicted of receiving personal data obtained through fraudulent means in a habitual way, and ordered to pay 1 million euros in fines and about 100,000 euros ($121,225) in damages.

Ingka Group, which owns and operates most Ikea stores, noted in a statement after the verdicts that the French retail operation "has strongly condemned the practices, apologized and implemented a major action plan to prevent this from happening again."

"We will now review the court's decision in detail and consider if and where any additional measures are necessary," the group said.

Trade unions accused Ikea France of collecting personal data by fraudulent means, notably via illegally obtained police files, and illicitly disclosing personal information. Lawyers for Ikea France denied that the company had any strategy of "generalized espionage."

A lawyer for the unions, Solene Debarre, expressed hope that the verdict would "make some companies tremble."

"One million euros isn't much for Ikea, but it's a symbol," Debarre said.

The company, which said it cooperated in the investigation, had faced a potential financial penalty of up to 3.75 million euros ($4.5 million). Prosecutor Pamela Tabardel asked the court to hand "an exemplary sentence and a strong message to all companies."

The executive who was in charge of risk management at the time of the spying, Jean-Francois Paris, acknowledged to French judges that 530,000 to 630,000 euros a year were earmarked for such investigations. Paris -- the only official to have admitted to the alleged illegal sleuthing -- said his department was responsible for handling the operation on orders from former Ikea France CEO Jean-Louis Baillot.

Paris was convicted of fraudulently gathering personal data, fined 10,000 euros ($12,125) and given an 18-month suspended sentence.

Baillot, who denied ordering a spy operation, was convicted of receiving fraudulently collected data and complicity in the scheme. He was fined 50,000 euros ($60,626) and given a two-year suspended sentence.

Another former CEO of Ikea France was acquitted for lack of evidence.

Ikea France's lawyer, Emmanuel Daoud, said the company hadn't decided whether to appeal. He said the case was marked by a lack of hard evidence, and noted that the fines were well below the maximum possible.

"The court took into account the action plan that Ikea put in place after the revelation of the facts, in 2012. That's very satisfying," Daoud said.

The company fired four executives and changed internal policy after French prosecutors opened a criminal probe in 2012.

Trade unions alleged that Ikea France paid to gain access to police files that had information about targeted individuals, particularly union activists and customers who were in disputes with Ikea.

In one situation, Ikea France was accused of using unauthorized information to try to catch an employee who had claimed unemployment benefits but drove a Porsche. In another alleged instance of illegal prying, the subsidiary reportedly investigated an employee's criminal record to determine how the employee was able to own a BMW on a low income.

The company also faces potential damages from separate civil lawsuits filed by unions and 74 employees.

Ikea's France subsidiary employs more than 10,000 people in 34 stores, an e-commerce site and a customer support centre.

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Jeffrey Schaeffer in Versailles and Elaine Ganley in Paris contributed.