Italy’s Competition Authority has launched an investigation into Giorgio Armani SpA and LVMH-owned Christian Dior Italia over allegations of unfair labor practices. The investigation focuses on claims that the brands sourced supplies from labs employing workers at inadequate wages and making them work excessively long hours under poor conditions. These practices, if proven, would sharply contradict the high production standards these luxury brands publicly boast.

In June, a Milan court placed a Dior unit under judicial control due to similar labor violations in its supply chain. Dior, which manufactures luxury accessories in Italy, failed to prevent labor exploitation, as per the police’s findings. Similarly, in April, Armani’s manufacturing unit faced judicial oversight for worker exploitation.

On Tuesday, financial police and antitrust officials searched the headquarters of Giorgio Armani SpA, G.A. Operations SpA, and Christian Dior Italia. The Armani Group has expressed its awareness of the investigation and commitment to cooperate, maintaining that the allegations lack merit. The company is optimistic about a favorable outcome. Dior has yet to comment.

This move signifies Italy’s continued crackdown on labor abuses in the fashion sector, aligning with broader EU regulations. Consequently, luxury brands must enhance oversight of their supply chains to avoid such legal and reputational risks.