Two senior executives of the Ikea are being questioned by French police over claims the Swedish furniture firm snooped on employees and customers.
The arrests of the chief executive officer of Ikea France, Stefan Vanoverbeke, and chief financial officer, Darius Rychert, come after more than a year and a half of investigations.
Jean-Louis Baillot, the former head of Ikea France is also being questioned, the BBC reports.
In April 2012, the company acknowledged practices in breach of its ethical standards and overhauled its management team the following month.
Ikea has encountered another food contamination problem after revealing that traces of coliform bacteria have been found in two "isolated production batches" of a cake produced for its restaurants. It's a bacteria found in faeces.
Ikea says the UK and Ireland are not among the 23 countries affected. The bacteria was found in almond cake with chocolate and butterscotch, from one supplier in Sweden. In a statement the company said:
"There is no health risk associated with consuming this product. The production batches have, as per safety and quality routines, been tested for bacteria that can cause health issues, such as E.coli, and none of these pathogen bacteria have been found.
"However, since the product does not comply with our strict food quality standards we have decided to withdraw the concerned production batches from sale in the 23 affected countries."
Last week Ikea said it was withdrawing wiener sausages in the UK after tests found "indications" of horse meat, and it also withdrew a batch of its traditional meatballs.
Russian officials said horsemeat has been discovered in sausages imported from Austria, the state-run news agency RIA Novosti reported.
Russia’s agriculture watchdog announced that although the sausages were labelled as 100 per cent beef "the presence of horse DNA was discovered".
The sausages are believed to have been supplied by an Austrian company, the agency added.
IKEA has stopped selling all minced meat products from its main Swedish supplier over horsemeat concerns.
IKEA said the move was an "extra-precautionary measure".
As well as withdrawing Familjen Dafgard's IKEA-branded wiener sausages from its stores in France, Spain, Britain, Ireland and Portugal, it has stopped selling stuffed cabbages and veal burgers in Sweden.
The announcement comes two days after the world's No. 1 furniture retailer took its trademark meatballs off the menu.
An IKEA spokeswoman has spoken after the company withdrew its wiener hot dog sausages:
Based on some hundred test results that we have received so far, there are a few indications of horsemeat.
Together with the Swedish supplier in question we have decided to withdraw wiener sausages from sale ... from that supplier.
Furniture giant IKEA is withdrawing wiener hot dog sausages in the UK after tests found "indications" of horsemeat, just days after it withdrew a batch of its traditional meatballs.
The Swedish company said it was removing the sausages from sale in Britain, France, Spain, Ireland and Portugal as an "extra-precautionary measure" as they are produced by the same supplier as the meatballs.
The IKEA Group has stopped selling meatballs in some parts of Europe as an "extra-precautionary measure" after tests detected horsemeat in the product.
The sales stop concerns meatballs manufactured by one supplier in Sweden and applies to all European countries except for Norway, Russia and a limited number of products in Switzerland and Poland.
A third of parents (33.6%) believe they may have served horsemeat to their children, a new poll reveals.
It suggests that the scandal has led many families to change their eating and shopping habits, with some no longer buying processed meat or eating ready meals.
The poll, by parenting website Netmums, questioned 1,293 parents for their views of the horse meat scandal.
IKEA takes the test result from the Czech Republic authorities showing indications of traces of horse meat seriously.
The concerned production batch of meatballs has been withdrawn from the Swedish Food Market in the IKEA stores.
Already two weeks ago, IKEA Group initiated DNA analyses of all meat products in the range.
12 tested samples of different batches of meatballs showed no traces of horsemeat.
To validate the test results, we are now initiating further tests on the same production batch in which the Czech Republic authorities found indications of horsemeat.
We are expecting test results in the coming days and will then be able to give more information.
A IKEA spokesman said the meatballs containing horsemeat had been on sale in countries including the Czech Republic, Britain, Portugal, Netherlands and Belgium The product has since been pulled from the shelves.