Devin Stone, the lawyer behind the YouTube channel Legal Eagle, is suing PayPal over its Honey browser extension. Filed on December 29 in California’s Northern District Court, the lawsuit accuses Honey of replacing creators’ affiliate links with its own, effectively diverting earnings from content creators. Stone, alongside several other creators, aims to secure class action status for the case.
Accusations Against Honey’s Affiliate Practices
The complaint centers on Honey’s practice of swapping affiliate links during transactions. According to the plaintiffs, the extension often claims credit for sales without offering shoppers any actual discounts. This tactic, they argue, violates California’s Unfair Competition Law and interferes with creators’ partnerships with affiliate programs.
Honey, purchased by PayPal in 2019 for $4 billion, is marketed as a tool to help users find coupon codes while shopping online. However, critics like YouTuber MegaLag have labeled the extension as deceptive. In a recent video, MegaLag outlined how Honey inserts its affiliate cookies into transactions, ensuring it earns commissions even when no discounts are applied. Stone referred to the extension as a “sleeping leech,” describing how it undermines creators’ revenue streams by intercepting affiliate commissions in the background in the video he published.
Adding to the criticism, the lawsuit highlights how PayPal enlists creators to promote Honey, only for the extension to later divert earnings from those same creators. Stone claims this devalues sponsorships and affiliate deals by interfering with creators’ relationships with their audiences.
PayPal has denied the allegations. In a statement shared with The Verge, Josh Criscoe, PayPal’s Vice President of Corporate Communications, defended Honey’s practices, stating that it follows industry standards such as last-click attribution. He noted that Honey provides millions of users with savings while helping merchants reduce cart abandonment and increase sales.
The plaintiffs acknowledge that last-click attribution is widely accepted in affiliate marketing. However, they argue Honey’s implementation is deceptive. They claim the extension tricks users into clicking pop-ups that replace legitimate affiliate links with Honey’s, even when no coupons are found.
The lawsuit seeks financial damages for affected creators and a permanent injunction to prevent Honey from altering affiliate attributions. A website has been launched to invite other creators to join the case, though the court has not yet certified it as a class action.
The outcome of this case could have significant implications for the affiliate marketing industry, particularly for browser extensions and content creators who rely on affiliate revenue to sustain their businesses.
Featured Image courtesy of Wikimedia Commons
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