More YouTubers have joined the legal fight against a browser plugin that points online shoppers to discount codes, claiming it allowed PayPal to poach the affiliate dollars they have earned.
Honey, acquired by PayPal in January 2020 for approximately $4 billion, searches the internet for coupon codes and applies them when a customer checks out with one of the 30,000+ businesses it’s partnered with.
The suit seeks, at minimum, $5 million that the plaintiffs believe Honey prevented from reaching creators, and an injunction to stop Honey from replacing affiliate links with its own.
The lawsuit states how affiliate links, a primary source of revenue for many creators with sponsorships, identify the source of a purchase and allocate a commission or other benefits to the appropriate online marketer.
The suit accuses the Honey browser extension of swapping existing affiliate links with its own, without the knowledge of partners. When a user clicks its service at checkout, Honey allegedly earns commissions or benefits for sales through last-click attribution, an industry standard practice where the last link used to refer a customer to make a purchase earns the commission.
Honey has sponsored numerous creators, including some of the largest YouTubers, such as MrBeast, Linus Tech Tips, and Marques Brownlee.
“PayPal enlists content creators and influencers to promote the Honey browser extension to their audiences, effectively enabling it to usurp the commissions and other benefits those same creators depend on for income,” the lawsuit states.
The suit adds that even when Honey fails to give a discount, it pops up messages such as “We searched for you but didn’t find any deals” or “You already have the best price,” and clicking these messages replaces any original marketer’s affiliate link with Honey’s, giving Honey commission for the sale.
It also alleges that Honey Gold, Honey’s reward system, and Honey suggesting to pay with PayPal, all override the original affiliate attribution and award Honey with the commission.
“Through these deceptive practices, PayPal systematically diverts commissions from rightful earners, undermining the affiliate marketing system,” the suit said.
The suit also argues that PayPal curates coupons and rejects user-submitted coupons that are not in its best interest.
A Honey spokesperson told The Epoch Times that they “dispute the allegations in the lawsuits, and will defend against them vigorously.
“Honey follows industry rules and practices, including last-click attribution, which is widely used across major brands,” the spokesperson said.
“Some might consider what PayPal is doing here dirty or highly unethical, but personally, I can’t see how it’s anything short of fraud,” MegaLag said. “PayPal didn’t refer the customer to the store. They didn’t promote any of the products … PayPal provided absolutely zero value to the customer, yet they were rewarded for the sale.”
A vast majority of creators that partnered with Honey say they were unaware of its alleged affiliate poaching, such as Penguinz0, a popular YouTuber with over 16 million subscribers who apologized for previously working with the company, saying he had no knowledge of what Honey is alleged to be doing.
Marques Brownlee, a tech reviewer with nearly 20 million subscribers, edited out the Honey sponsorships from the three videos of his that they sponsored.
