Spying scandal snares Ikea executives

Prosecutors have placed three senior Ikea executives in France under investigation amid allegations that they authorised illegal spying on employees and customers.

The case has raised uneasy questions about the sharing of data between law enforcement and businesses. French prosecutors said this week that the chief executive of Ikea France, Stefan Vanoverbeke, and two other people were being investigated for possible involvement in a conspiracy to collect a range of personal information, including criminal records, vehicle registrations and property records.

The prosecutors said the information was collected to check on employees or to reveal unflattering background information about customers bringing complaints or lawsuits against Ikea, the Swedish home furnishings company with operations in more than 40 countries.

Vanoverbeke's predecessor as chief executive, Jean-Louis Baillot, and Ikea France's chief financial officer, Dariusz Rychert, were also placed under investigation, as were two unnamed police officers. Ikea France has been ordered to post a bond of €500,000 ($730,000), while the inquiry continues, raising the possibility that the company could face legal action as well. Under the French legal system, being placed under formal investigation is one step short of criminal charges.

Government records on individuals are strictly protected under the law, and allegations that they may have been shared with a private company have raised hackles with unions and consumer groups.

The three men were taken in for questioning this week by investigators in Versailles, near Paris, and were formally placed under investigation. The move followed a police search of the headquarters of Ikea France in nearby Plaisir last month, as well as interviews with about a dozen witnesses, including current and former Ikea employees and police officers.

Ikea France said the company took the allegations seriously and was fully co-operating with investigators.

The allegations first came to light early last year, when the French magazine Le Canard Enchainé published what it said were emails between Ikea France executives and a private security company. According to the emails, Ikea had sought background checks on as many as 200 people, for which it paid €80 per request. The emails also indicated that a private security company, Sûreté International, had access to the computer databases of the national police, which contain the personal information of millions of French residents.

In a statement, Ikea acknowledged that an internal investigation, conducted after the media revelations last year, had uncovered "regrettable practices, contrary to our values and ethics standards". That inquiry resulted in the dismissal in May last year of four directors of the French unit, including the head of risk management, and an overhaul of the company's code of conduct.

The people said to be the targets of spying included store employees, union leaders and job applicants and dated back as far as 2008. The surveillance was also said to involve stores in at least nine locations in France, including Avignon, Grenoble, Reims and Tours.

At least one labour union, Force Ouvrière, is suing the company for "fraudulent use" of its members' personal data.

"This is a first-rate example of how protecting one's identity and privacy is getting harder and harder to do, as technology gets ever more sophisticated, even in Europe, where privacy has been elevated to almost a sacrosanct principle," said Christopher Mesnooh, a partner at Field Fisher Waterhouse in Paris