Luxury fashion brands Dior and Armani are being investigated for misleading consumers, after courts in Italy found that suppliers for the companies mistreated and exploited factory workers. 

Both companies have been under scrutiny for months, and prosecutors in Milan July 17 revealed that Armani and Dior had subcontracted out production of their handbags to Chinese companies that violated a litany of regulations on ethical labor practices. According to Reuters, Chinese-owned suppliers in Italy that fed a subsidiary of Dior removed safety devices from machines to allow them to operate faster, and forced workers to live and sleep in factories.

An arm of Armani faced similar allegations in April, when a court found the company had subcontracted out to Chinese suppliers with factories in Italy that paid workers €2-3 ($2.16-3.25) an hour for 10 hour workdays, while forcing them to work seven days a week. Bags made in those facilities were sold to Armani subcontractors for €93 each, then to Armani for €250, and finally to consumers for €1,800. 

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The conditions in those factories and the significant markup on the handbags are the focus of the new investigation from Italy's Competition Authority (ICA), which enforces antitrust and consumer protection laws. The ICA says it is looking into whether Armani and Dior deceived consumers with messaging that "emphasized the craftsmanship and the excellence of their workmanship." 

Dior tells Reuters it has stopped taking orders from the suppliers named in the investigation, which it alleges had hidden their labor practices from the company "despite regular audits." Armani claims that "the allegations have no merit" and that they are cooperating with authorities.