The Australian Competition and Consumer Commission took Clorox Australia to the Federal Court over the misleading claims made between June 2021 and July 2023.
Clorox had marketed and supplied the kitchen and garbage bags as being made from 50 per cent recycled plastic waste collected from the ocean or sea.
Instead, the bags comprised recycled plastic that had been collected from communities in Indonesia situated up to 50km from the shoreline.
Clorox sold more than 2.2 million bags during the offending period, with the price for each item generally higher than its standard range of household kitchen bags.
The company discontinued supply after the consumer watchdog started investigating and the products are no longer supplied in Australia.
Clorox admitted the "50 per cent ocean plastic recycled" claims displayed on the bag packaging were misleading and worked with the ACCC to reach an agreed penalty.
Federal Court judge Penelope Neskovcin enforced the $8.25 million fine on Monday after finding Clorox had engaged in greenwashing.
"The (misleading claims) deprived consumers of the opportunity to make informed purchasing decisions, free from the false impression conveyed," the judgment read.
"Consumers might have purchased alternative products, including from Clorox's competitors, and may have purchased products that offered substantiated environmental benefits or that were cheaper."
The judge accepted that while the conduct was serious, it was not the most serious case of environmental misrepresentations.
"Clorox genuinely believed the products would contribute to the reduction of plastic waste in the ocean and did not deliberately engage in a strategy to mislead consumers," the judgment read.
Justice Neskovcin noted Clorox had discussed recycled plastics with its supplier Oceanworks and considered "ocean bound' plastics to be a kind of ocean plastics.
But the judge determined the company knew the recycled plastics were not collected or recovered directly from the ocean or sea.
As part of the penalty, Clorox will have to pay $200,000 of the consumer watchdog's legal costs and publish a corrective note, explaining the offending and apologising to consumers.
A Clorox Australia spokeswoman said the company took seriously its obligations to package and market products with accurate claims.
"We respect this outcome and see this as an opportunity to further enhance our practices and reaffirm our commitment to offering products that help reduce environmental impact and meet consumers' evolving needs," the statement read.
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