A new lawsuit alleges that Honey, the PayPal-owned browser extension, is scamming creators out of money.
Honey, which PayPal acquired for $4 billion in 2019, works by britcommerceally presenting users with relevant coupon codes as they shop. However, in a video posted last monthYouTuber MegaLag described Honey as a “scam” that involves “stealing money from influencers.”
Among other accusations, MegaLag said that if a YouTuber or other creator promotes a product through an affiliate link, if the viewer has installed Honey, the extension will surreptitiously substitute its own link when the viewer makes a purchase, even if Honey did not provide any discount. That means Honey, not the creator, receives the affiliate’s revenue from the transaction.
Now Devin Stone, a resident of Washington, D.C. lawyer who publishes videos on his popular LegalEagle YouTube Channelhas filed a lawsuit against PayPalalleging that the company “systematically diverts commissions from legitimate beneficiaries, undermining the affiliate marketing system.”
“To add to the irony, PayPal recruits content creators and influencers to promote the Honey browser extension to their audiences, effectively allowing it to usurp the commissions and other benefits those same creators rely on for income,” Stone said in his demand.
britcommerce has contacted PayPal for comment. The company shared a statement with The Verge saying that it disputes the allegations and will “vigorously” defend itself and adding that “Honey follows industry rules and practices, including last-click attribution” (an advertising attribution system where the final point of contact gets all the credit for a purchase).
Naturally, Stone too posted a video about the lawsuit, which also emphasized Honey’s marketing efforts, in which creators promoted the browser extension to their audiences, and once those audiences installed it, Stone said it was like a “sleeping leech” on their browsers. , “waiting for the viewer to make a transaction.”
“And so, forever, the creator’s future sponsorships, their future affiliate relationships, and their ads were devalued now that the creator’s audience was infected,” he said.
Stone added that he is seeking class action status for the lawsuit and looking for other creators to join.