Italy’s competition watchdog has initiated an investigation into Giorgio Armani Group and Christian Dior Italy for allegedly engaging in unfair commercial practices. This follows recent findings by Milanese authorities that their suppliers were involved in worker abuse and exploitation. The investigation reveals that these luxury brands might have employed factories that severely underpaid workers, many of whom were undocumented migrants, working long hours in unsafe conditions.

The antitrust regulator, supported by the Italian financial police’s special antitrust unit, conducted inspections at Armani and Dior Italy premises. The investigation stems from earlier probes that uncovered human rights violations at the companies’ contractors, prompting judicial administrations for Giorgio Armani Operations and Manufacturers Dior, albeit without criminal charges.

Armani refuted the allegations, expressing confidence in a favorable investigation outcome and its commitment to cooperate with authorities. Dior acknowledged the severity of the violations and announced it would cease orders with the implicated contractors, admitting that regular audits failed to detect the exploitative practices.

The investigation underscores the need for luxury brands to enhance trust-based supplier relationships. Effective communication, support, and consistent orders from luxury brands can lead to better production quality and sustainability practices from suppliers. Dior plans to integrate production into its own ateliers to ensure better working conditions for those contributing to its products.