A new lawsuit claims the PayPal-owned Honey browser extension is cheating creators out of money.
Honey, which PayPal bought for $4 billion in 2019, works by automatically presenting users with relevant coupon codes as they shop. However, in a video posted last month, YouTuber MegaLag described Honey as a “fraud” who is “stealing money from influencers.”
Among other allegations, MegaLag said that if a YouTuber or other creator promotes a product through an affiliate link, if the viewer has Honey installed, the extension will surreptitiously replace their link when the viewer makes a purchase — even if Honey has not given any discount. This means that Honey, not the creator, receives the affiliate revenue for the transaction.
Now Devin Stone, a Washington, D.C.-based attorney who posts videos on his popular YouTube channel, LegalEagle, has filed a lawsuit against PayPal, alleging that the company “systematically diverts commissions from legitimate winners, harming affiliate marketing system”.
“Adding to the irony, PayPal engages content creators and influencers to promote the Honey browser extension to their audiences, effectively enabling it to usurp the commissions and other benefits these creators depend on for revenue,” Stone said in the lawsuit. his.
TechCrunch has reached out to PayPal for comment. The company shared a statement with The Verge saying it disputes the allegations and will defend itself “vigorously,” adding that “Honey follows industry rules and practices, including last-click attribution” (an ad attribution system where points final contact receives all credit for a purchase).
Of course, Stone also released a video related to the lawsuit, which also highlighted Honey’s marketing efforts, in which the creators promoted the browser extension to their audiences — and once those audiences installed it, Stone said it was like a ” dormant stream” in their browsers. “waiting for the viewer to complete a transaction.”
“And so, forever after, the creator’s future sponsorships and future affiliate relationships and advertising were invalidated now that the creator’s audience had been infected,” he said.
Stone added that he is seeking class action status for the lawsuit and is looking for other creators to join.
