Italy’s competition authority has launched an investigation into luxury fashion brands Armani and Dior over allegations of worker exploitation in their supply chains. The probe focuses on whether these brands have misled consumers about their ethical production practices, amid reports of inadequate wages and poor working conditions.

The authority’s statement highlights that both Armani and Dior may have issued false claims regarding their social responsibility, particularly concerning the treatment of workers by their suppliers. Inspections were conducted at several firms within the Armani Group and the LVMH-owned Dior Group on Tuesday.

The investigation aims to determine if the brands engaged in unlawful conduct in marketing and selling clothes and accessories, violating Italy’s Consumer Code. If found guilty, the companies could face fines of up to €10 million ($10.9 million).

Luxury fashion brands like Armani and Dior have long emphasized their commitment to craftsmanship and quality, often implying that their high prices and European production ensure ethical practices. However, this investigation challenges such perceptions, revealing that even top-tier brands might be linked to exploitative labor practices.

According to the competition authority, some suppliers for Armani and Dior have employed workers at inadequate wages and forced them to work long hours under unsafe conditions. This revelation contrasts starkly with the brands’ publicized standards of production excellence.

The probe follows accusations from Milan prosecutors that several Chinese-owned firms in Italy, which produce luxury goods for Dior and Armani, have systematically abused their employees. These firms are accused of subjecting workers to harsh conditions, further intensifying scrutiny on the luxury fashion industry.

In response, Dior stated that Italian authorities had informed them of illegal practices at two of their leather goods suppliers. Dior condemned these acts, stating they contradict the brand’s values and their suppliers’ code of conduct. The company has ceased placing new orders with the implicated suppliers and is cooperating with the authorities.

Armani has denied the allegations but expressed willingness to cooperate with the investigation. The company remains confident in a favorable outcome, asserting that the accusations lack merit.

This investigation sheds light on the persistent issues of labor exploitation in the fashion industry, urging consumers and authorities to hold even the most prestigious brands accountable for their supply chain practices.