PayPal Honey Faces Class-Action Suit for Allegedly Manipulating Affiliate Links

PayPal Honey, a free browser extension that aggregates and applies coupons for shoppers on ecommerce sites, has been hit with a class-action suit from creators over allegedly manipulating affiliate links.

As reported by Dexerto, attorney Devin Stone, whose LegalEagle YouTube account has nearly 3.5 million followers, filed the suit, which includes a request for an injunction to halt PayPal Honey’s business practices.

A PayPal spokesperson said the company disputes the allegations and will defend itself vigorously.

According to Dexerto, online investigator MegaLag lit the fuse with a YouTube video posted Dec. 22, in which he accuses PayPal Honey of replacing creators’ affiliate codes with its own. As a result, PayPal Honey was able to take credit for purchases—and pocket the corresponding affiliate fees—that would otherwise go to those creators.

MegaLag also accused PayPal Honey of working with companies to control which coupons users saw, meaning they weren’t necessarily getting access to the best deal.

Creators and influencers often promote products and services to their followers and earn commissions through affiliate programs, which track the links they share to attribute credit for purchases made through them. Creators then earn a fee for driving those purchases.

According to LegalEagle, if these allegations are true, it means that PayPal Honey is taking credit for work creators have done to promote products and drive purchases from their followers.

“Think about how insidious this all was,” Stone said in a YouTube video detailing the case. “Honey spent tens of millions of dollars, maybe even hundreds of millions of dollars, sponsoring some of the most beloved and successful creators on the planet. Honey allegedly seeded those audiences with their extension. And that extension probably stayed on their audience’s browsers like a sleeping leech, waiting for the viewer to conduct a transaction.”

He continued, “Forever after, the creator’s future sponsorships and future affiliate relationships and advertisements were devalued now that the creator’s audience was infected. The exact people who would be most likely to listen to the recommendations of that creator—which, by the way, is the reason why it’s so important to vet their sponsors and make sure they believe in the products—were now likely to be sniped.”