Party Pieces, the website owned by Kate Middleton's parents Carole and Michael, has been accused of selling party goods made in Mexican ghettos by families making as little as 10 pence (15 cent) per hour.
The products in question are candy-flled pinatas.
An investigation by The Daily Mail found that the pinatas are being produced in hillside ghettoes surrounding Tijuana, by families who say they are providing "slave labour" to produce the items.
A spokesman for the company said that as a responsible retailer, it took the allegations "very seriously and we will work with our suppliers to carry out investigations into these claims".
Party Pieces was founded in 1987 by Carole Middleton, after she gave up work as a British Airways stewardess.
She built up the firm with her husband, Michael, and it now employs more than 30 people, including their daughter Pippa.
Party Pieces has made the Middleton family fabulously wealthy.
Their three children were educated at Marlborough College, where fees are £27,000 a year. Before Kate was married, her parents bought her a £780,000 flat in Chelsea; and they holiday on the paradise island of Mustique, from which they and Prince William have just returned.