Due Diligence: Further crackdown on Dior and Armani

Following a Milan court's actions against Dior and Armani for mistreatment of workers in their leather goods supply chain, Italy's competition authority is now investigating potential consumer code breaches

Why it matters: If found guilty, Dior and Armani could face fines ranging from €5,000 to €10 million for breaches of the consumer code. The investigation focuses on discrepancies between the brands' claims of artisanry and the conditions uncovered in labor investigations.

The bottom line: This investigation could significantly impact the reputation and financial standing of these luxury brands. The authority noted that both brands "emphasised the craftsmanship (of their products) and the excellence of their workmanship" while allegedly using workshops with poor labor conditions.

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Auret Van Heerden, from Equiception Business and Human Rights, commented:

Are we seeing the emergence of a new nexus of labour law, competition law, consumer protection and green claims laws? This is particularly interesting given all the speculation of a possible roll-back of due diligence laws in the EU. The human rights and environmental risks that due diligence laws are meant to address have real costs and if companies don't prevent them, old fashioned enforcement agencies may step into the breach.