Summary
- YouTuber and lawyer Devin Stone (LegalEagle) has filed a class-action lawsuit against PayPal, Honey’s parent company, over the extension’s alleged practice of replacing creators’ affiliate links with its own.
- The lawsuit, filed in California’s Northern District Court, seeks damages and a permanent injunction to prevent Honey from continuing this practice, which Stone describes as a ‘sleeping leech’ and a ‘scam.’
- PayPal disputes the allegations and maintains that Honey follows standard industry practices, including last-click attribution, and intends to defend itself vigorously.
I’m sure you’ve heard of the popular browser extension Honey. The extension, which claims to automatically find and apply coupons for your online purchases, has previously been promoted by some of the biggest creators on YouTube, including the likes of MrBeast, MKBHD, Linus Tech Tips, and more.
The extension, which is a PayPal-owned service, has been in hot waters since late last month, when it was found to be indulging in malicious and deceptive affiliate linking practices — exposed by YouTuber MegaLag, who has since gained roughly 500,000 new subscribers.
The exposé itself has gained over 15 million views, and several more via coverage from other YouTubers and news aggregators.
For those unaware, here’s a brief synopsis of what Honey was doing:
The browser extension promises to scour the internet for the best digital coupons and promo codes available for over 30,000 online shopping websites. However, according to MegaLag, the extension often prioritizes coupon codes from its partnering stores, even though there are better offers/codes out there.
But that’s not the main reason why the extension is in hot waters. The YouTuber also highlighted that the extension swapped out creator affiliate links with links of its own — regardless of whether the extension successfully found a viable coupon/promo code or not. This essentially meant that Honey had long been hijacking the commission a creator would have rightfully earned for referring their audience to a product.
LegalEagle is taking Honey and PayPal to court
Now, as part of a new development, American lawyer and YouTuber Devin Stone, known for his legal commentary on the channel LegalEagle, is suing Honey’s parent company PayPal over the extension’s reported parasitical practices.
“Creators are saying that Honey is a scam. They believe that Honey steals from creators. So, on behalf of creators everywhere, I have filed a class action lawsuit to stop it,” states Stone, going as far as calling the extension a “sleeping leech.”
Stone’s lawsuit was filed on December 29 in California’s Northern District Court, seeking “damages, including actual, nominal, consequential, and punitive (exemplary) damages, disgorgement, and restitution” for the affected creators, alongside “a permanent injunction restraining” Honey from being able to replace creator affiliate links with its own during checkout. Stone is urging affected creators to join the lawsuit, with a dedicated website set up for it.
PayPal, on the other hand, intends to fight the allegations, stating that Honey follows industry practices. Josh Criscoe, the fintech company’s VP of corporate communications, in a statement given to The Verge, said that PayPal “dispute[s] the allegations in the lawsuits, and will defend against them vigorously. Honey is free to use and provides millions of shoppers with additional savings on their purchases whenever possible. Honey helps merchants reduce cart abandonment and comparison shopping while increasing sales conversion. Honey follows industry rules and practices, including last-click attribution, which is widely used across major brands.”
