Proposed class action lawsuit The lawsuit was filed Dec. 29 in the Northern District of California Court by Stone's Eagle Team LLP and several other YouTubers' businesses. It accuses Honey of deliberately replacing creators' affiliate links with its own affiliate links even though it's not providing any benefits to buyers, depriving creators of money in the process.
The complaint alleges that PayPal's practice violates California's unfair competition law and constitutes interference between creators and their business partners. The plaintiffs are seeking to represent someone who was part of an affiliate program and whose link was “redirected to PayPal as a result of the Honey browser extension.” Class action status has not yet been certified by any court.
Honey works by offering to find coupon codes through its browser extension. A MegaLag video from last month explained that when shoppers interact with its pop-up offer at checkout, it replaces existing affiliate cookies in the background with its own and gets credit for the sale, regardless of whether they actually received it. Whether coupon has been received or not.
The complaint lists other ways PayPal is allegedly claiming affiliate commissions. This includes offering rewards to users through its Honey Gold program and encouraging them to “get rewards with PayPal”, which prompts them to check out using PayPal.
“We dispute the allegations in the lawsuit, and will vigorously defend against them,” Josh Crisco, PayPal VP of corporate communications, said in an emailed statement. The Verge. He added that “Honey follows industry rules and practices, including last-click attribution.”
The lawsuit acknowledges that last-click attribution is a standard practice that credits the most recent affiliate with the sale at checkout. The plaintiffs argue that Honey is using that standard practice in a way that is “deceptive and secretive”, enticing users to click on useless pop-ups that insert his code. We've contacted PayPal for a statement on the lawsuit.
Lawyers are asking the court to require PayPal to pay damages to creators and permanently ban PayPal from swapping out its own affiliate attribution at checkout. they have set up a website Inviting other creators to join the lawsuit.
Here is Crisco's full statement:
We dispute the allegations in lawsuits, and will vigorously defend against them. Honey is free to use and provides millions of shoppers with additional savings on their purchases whenever possible. Honey helps merchants increase sales conversion as well as reduce cart abandonment and comparison shopping. Honey follows industry rules and practices, including last-click attribution, which is widely used across major brands.
Update January 5: The statement added from Josh Crisco, PayPal VP of Corporate Communications.