Clorox Faces $5.2 Million Penalty Over Misleading 'Ocean Plastic' Claims

Key Takeaways

• $8.25 Million Penalty: Clorox was ordered to pay $8.25 million ($5.2 million USD) for misleading consumers about GLAD bags being made from recycled “ocean plastic,” which was not the case.
• Misleading Claims: The products were marketed as containing 50% ocean plastic, but the material came from waste collected in communities with no formal waste management systems, far from the ocean.
• Consumer Trust: The court emphasized that misleading environmental claims harm consumer trust, especially when such claims impact purchasing decisions.
• Clorox's Response: Clorox cooperated with the ACCC, admitted to the misleading claims, and discontinued the products once the investigation began.

Deep Dive

Clorox Australia has recently been hit with an AUD $8.25 million ($5.2 million USD) penalty for making false statements about the composition of its GLAD products. The Federal Court’s ruling marks the end of a legal battle that began after the Australian Competition and Consumer Commission (ACCC) uncovered misleading claims about GLAD Kitchen Tidy Bags and Garbage Bags being made from recycled ‘ocean plastic.’

From June 2021 to July 2023, Clorox marketed these bags as being made from 50 percent ocean plastic. However, after an investigation, it was revealed that the plastic used in the bags wasn’t pulled directly from the ocean at all. Instead, it came from waste collected in communities in Indonesia—far from the ocean, and in areas without proper waste management systems. The bags also contained a mix of non-recycled plastic and other materials.

The packaging for these products was designed to appeal to environmentally conscious consumers, with statements like “50% Ocean Plastic Recycled Bags” printed boldly across the front. Ocean-themed imagery and a soothing blue color palette were used to reinforce the idea that the bags were made with materials pulled directly from the sea.

But as it turned out, the reality was far from what consumers were led to believe. And when consumers are misled by green claims—especially about something as crucial as plastic pollution—it’s more than just a missed opportunity; it undermines trust in the very idea of sustainability.

Gina Cass-Gottlieb, Chair of the ACCC, made it clear: "Claims about environmental benefits matter to many consumers and may influence their purchasing behavior. When those claims are false or misleading, this is a serious breach of trust."

This breach not only misled consumers, it also put competitors who accurately advertise their environmental claims at a disadvantage. The court noted that misleading environmental claims harm consumer confidence in the broader effort to tackle plastic pollution.

What Happened in Court

The court found that Clorox had failed to accurately convey what “ocean plastic” really meant. While the company included a disclaimer in small print on the back of the packaging stating that the bags were made from "ocean bound plastic" collected from communities far from the shoreline, it didn’t do enough to clear up the misleading messaging on the front. These efforts were seen as insufficient by the court, which took issue with the prominent ocean imagery and the use of the term "green"—both of which strongly suggested an environmental benefit that wasn’t actually there.

The ruling went beyond just the packaging, noting that such conduct harms consumer trust in environmental claims overall. As Cass-Gottlieb pointed out, misleading claims not only impact consumer confidence but also detract from the efforts of companies genuinely working to reduce their environmental impact.

Along with the hefty $8.25 million penalty, Clorox has been ordered to roll out a compliance program aimed at ensuring future adherence to Australian Consumer Law. The company also agreed to publish a corrective notice on its website and to pay part of the ACCC’s legal costs. It’s worth noting that Clorox did take steps once it became aware of the ACCC’s investigation—discontinuing the misleading products in July 2023, before the formal proceedings were initiated.

But the bigger takeaway here? This case sets a precedent for companies to take extra care when making environmental claims. With increasing consumer demand for sustainability, businesses must tread carefully and ensure their marketing doesn’t cross into the dangerous territory of greenwashing—misleading consumers into believing they’re supporting environmental causes when they’re not.

What Businesses Can Learn

As the ACCC continues to crack down on false or misleading green claims, businesses should pay close attention. The commission has already made it clear that if you're making environmental claims, those claims need to be accurate, clear, and substantiated.

While Clorox cooperated with the ACCC’s investigation and admitted to the misleading claims, the fine is a reminder that the public (and regulators) are paying close attention to what companies say about their environmental impact.

Consumers expect transparency, and businesses must deliver. And while innovation in sustainability is encouraged, it must be paired with honesty. As Cass-Gottlieb stated, "We take allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and, where appropriate, will take enforcement action."

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