Italy’s antitrust regulator has fined fashion group Giorgio Armani and one of its subsidiaries €3.5 million ($4 million) for unfair commercial practices, it announced on Friday.

The Giorgio Armani group has rejected the accusation and confirmed it will appeal the ruling.

According to the regulator, the two companies “issued misleading ethical and social responsibility statements in contrast with the actual working conditions found at suppliers and subcontractors.”

The authority noted that Armani outsourced most of its bag and leather accessory production to third-party manufacturers. These external suppliers, in turn, subcontracted to other producers — some of which employed workers illegally and failed to meet health and safety standards.

The watchdog said that while Armani promoted

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