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$700k Legal Lesson for Lululemon - When ‘Service Emails’ Become Spam
- Key Takeaways
- Even “service” or transactional emails can be classified as marketing if they include promotional content.
- If a message is commercial in any way, it must comply with the Spam Act 2003 (Cth), including a functional unsubscribe option.
- Mischaracterising emails as non-commercial is a growing enforcement focus for regulators.
- Separating service communications from marketing content is the simplest way to manage compliance risk.
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What Happened?
Activewear retailer Lululemon Athletica Australia Pty Ltd has been fined $702,900 by the Australian Communications and Media Authority (ACMA) after sending more than 370,000 emails without a functional unsubscribe facility.
The emails, sent between December 2024 and January 2025, were largely framed as transactional updates, including order confirmations and shipping notifications. However, they also contained promotional material and links to sales content.
Why This Was a Breach
Under the Spam Act 2003 (Cth), a commercial electronic message includes any email, SMS or similar communication where one of the purposes is to promote goods, services or a business.
Lululemon argued the emails were primarily factual and therefore not commercial. The ACMA disagreed, finding that:
- the inclusion of promotional content meant at least one purpose was marketing;
- the emails were therefore commercial electronic messages; and
- each email required a functional unsubscribe facility.
This resulted in more than 370,000 contraventions of the legislation.
A Clear Trend from Regulators
This is not an isolated case. The ACMA has taken multiple enforcement actions in recent months where businesses attempted to classify communications as “non-commercial” despite including marketing elements.
The regulator’s message is clear:
If there is any promotional content, the full compliance obligations apply.
What This Means for Your Business
For many businesses, particularly those with automated customer communications, this decision highlights a common risk area.
Blended communications are often used for efficiency, but they create exposure where:
- transactional emails include marketing banners, offers or links;
- system-generated messages are not reviewed for compliance; or
- unsubscribe functionality is overlooked in “non-marketing” templates.
The practical takeaway is simple - intent does not determine compliance, content does.
Practical Steps to Reduce Risk
To minimise exposure under the Spam Act 2003 (Cth):
- Separate service and marketing messages - Keep order updates, invoices and account notifications free from promotional material.
- Review all customer communication templates - This includes automated and system-generated emails.
- Ensure unsubscribe functionality is always present where required - It must be clear, functional and easy to use.
- Train internal teams - Marketing, operations and IT teams should understand how small content changes can shift a message into “commercial” territory.
Final Word
As noted by the ACMA, the simplest approach is often the best - keep service communications clean and separate from marketing.
For businesses that rely heavily on automated communications, this case is a timely reminder that compliance needs to be built into systems and processes, not added as an afterthought.
