I was away on vacation when Megalag’s video exposing the Honey browser extension went bonkers in the YouTube creator space. This week a class action lawsuit was filed by Legal Eagle against the extension’s owner, Paypal. In my latest video, we dive into the controversy and the lawsuit. I’m not as bullish as some are about the potential to take Paypal to the cleaners over this.
For those unfamiliar with the situation, Honey has been accused of altering cookies associated with affiliate links. Here’s how it works: If you click on an affiliate link I’ve shared in a video description and later use Honey to check for coupons at checkout, the extension reportedly replaces my affiliate code with their own. This practice diverts commissions from creators like me to Honey.
The lawsuit alleges that Honey’s practices interfere with contractual relationships between creators and the affiliate networks they work with. For instance, I agreed to a contract with affiliate network providers that defines how the program works, rules that I need to abide by, and how I will be compensated. The lawsuit argues by replacing my affiliate cookie, Honey effectively disrupts this agreement. There are also claims of unjust enrichment, as PayPal benefits financially from this interference.
It’s worth noting that Honey has openly admitted to its cookie-swapping behavior in the past. Posts dating back to 2019 and 2022 confirm this. So the big question here is not if Honey is doing this but whether their conduct is interfering with the relationships creators have with affiliate providers.
This will be complicated by the fact that Honey has its own contractual relationships with the the same affiliate networks as creators. Because all of these agreements state the “last click” gets the sale – is it interference if everyone has a contract and agreed to how this competitive marketplace works? That will be up to the judge to decide.
Proving damages in this case is likely to be challenging. Affiliate systems rely on cookies, and tracking the origin of every redirected click often involves digging through extensive logs maintained by companies like PayPal. The plaintiffs in this lawsuit believe these records exist, but it remains to be seen whether the court will grant access during discovery. Even if the records can be accessed, it will be very difficult to match individual URLs to specific creators. You can see an example of that in my video.
For creators like me, the discrepancies between clicks recorded on my tracking system and those reported by affiliate networks have always raised questions. While Honey’s actions might be part of the issue, ad blockers, browser settings, and other factors play a role too.
As for the lawsuit, it’s still early days. Class action cases like this can take years to resolve, and even when settlements occur, they rarely offer much compensation for individuals. In most cases, the legal teams walk away with the largest share of the financial outcome. For instance, a previous class action against Apple awarded individual plaintiffs small sums, while the attorneys received tens of millions.
For now, I’ll be watching this case unfold with interest. While I’m not optimistic about the likelihood of significant outcomes for creators, the attention this issue is receiving could spark discussions about the ethical standards of affiliate marketing and the accountability of major players like Honey.