Legal Eagle Sues PayPal Over Honey Extension's Affiliate Practices

Legal Eagle's Devin Stone Sues PayPal Over Honey Extension Practices

Devin Stone, the renowned YouTuber from the channel Legal Eagle, has recently taken legal action against PayPal concerning the controversial practices of its Honey browser extension. Announced in a video published on Friday, this potential class action lawsuit was filed on December 29th in California’s Northern District Court.

Allegations Against Honey and PayPal

The complaint, lodged by Stone’s Eagle Team LLP along with several other YouTube creators’ businesses, accuses the Honey extension of altering affiliate links without consent. According to the lawsuit, Honey is said to intentionally replace the affiliate links of creators with its own, often without providing any real benefits to the shoppers. This practice reportedly deprives creators of rightful earnings.

The plaintiffs assert that such actions violate California’s Unfair Competition Law and constitute interference with the relationships that creators have with their business partners. They seek to represent all individuals who have participated in any affiliate program and had their links redirected to PayPal through the Honey extension. However, it is important to note that class action status has yet to be certified by a court.

Understanding How Honey Works

Honey operates by using a browser extension that claims to find the best coupon codes for online shoppers. According to a video by fellow YouTuber MegaLag, Honey allegedly replaces existing affiliate cookies with its own during the checkout process. This means that regardless of whether Honey finds a coupon code or not, it can claim credit for the sale.

The Nature of Affiliate Program Disputes

Further complicating the matter, the complaint outlines additional methods by which PayPal appears to claim affiliate commissions. This includes the use of its Honey Gold Program that offers users rewards, as well as prompts encouraging users to check out using PayPal, which can lead to further contention over commission attribution.

Industry Practices Versus Allegations of Deceit

In response to these allegations, Josh Criscoe, PayPal’s VP of Corporate Communications, stated in a previous interview with The Verge that the company adheres to “industry rules and practices, including last-click attribution.” This is a standard practice in affiliate marketing that credits the most recent affiliate for a sale. However, the plaintiffs argue that Honey manipulates this practice deceptively, using attention-grabbing pop-ups to insert its tracking code while providing no real value to the shopper.

Legal Demands and Creator Advocacy

The lawsuit demands not only damages to be paid to creators but also a permanent injunction that would prevent PayPal from altering affiliate tracking in such a manner at checkout. To further bolster their case, the plaintiffs have created a website encouraging other creators who may have been harmed by these practices to join the lawsuit.

Conclusion

This class action lawsuit raises important questions about the ethics and fairness of affiliate marketing practices, especially with the increasing complexity of how these transactions are tracked online. As the case unfolds, it will be crucial to see how it impacts both creators and platforms like PayPal.