Dior to pay $2.3M after labor exploitation probe in Italy
What's the story
Luxury brand Dior, owned by LVMH, has agreed to a set of remedies after Italy's competition authority launched an investigation against it.
The investigation was based on allegations that Dior and two of its subsidiaries deceived consumers regarding the working conditions at their suppliers.
The antitrust body concluded the investigation without establishing any infringement, noting that Dior's commitments were an appropriate remedy for the possible unlawfulness.
Financial commitment
Dior's commitments to support labor exploitation victims
As part of the settlement, Dior has promised to pay €2 million ($2.3 million) over five years to fund initiatives to assist victims of labor exploitation.
The move comes after Milan prosecutors found workshops where underpaid workers, often undocumented immigrants, manufactured leather bags for Dior and Armani at a fraction of their retail price.
Supply chain oversight
Changes to ethical and social responsibility statements
Dior has also promised to update its ethical and social responsibility statements and enforce stricter processes for choosing and monitoring suppliers.
The company said it "partnered closely with the Authority to define a robust set of commitments that increase transparency and strengthen oversight throughout its supply chain."
This comes after an Italian court put a Valentino unit under judicial administration for a year over worker abuse in its supply chain.