PayPal's Honey Under Fire: Lawsuits Allege It's a 'Scam' That Steals from Creators and Small Businesses
PayPal's Honey extension faces a firestorm of controversy and lawsuits from YouTubers over allegations it "steals" commissions and exploits businesses. We break down the accusations.
The Breakdown
PayPal's Honey, the widely popular browser extension celebrated for unearthing online coupon codes, is now at the center of a major controversy. A series of damning accusations, which include claims of siphoning money from content creators and exploiting small businesses, have culminated in class-action lawsuits from prominent YouTubers.
The Accusations: "Stealing Money from Influencers"
The scandal ignited after a deep-dive investigation by YouTuber MegaLag. In a 2024 video, he accused Honey of “stealing money from influencers” by exploiting a system called last-click attribution to swap its own tracking cookies for theirs at the last second. A follow-up video leveled even more serious allegations, claiming Honey:
- Targeted minors by sponsoring YouTubers with large, young audiences, like Mr Beast.
- Collected data on people who had never even signed up for its service.
- Exploited small businesses by using their private coupon codes, causing revenue loss, and then allegedly pressuring them to sign up as official partners.
What is Last-Click Attribution?
It's a common model in affiliate marketing where 100% of the credit for a sale is given to the last link a customer clicked before making a purchase. The core accusation is that when a user clicks the Honey button at checkout to search for codes, Honey's cookie becomes the "last click," overwriting any original affiliate cookie from a creator or publisher and redirecting the commission to itself.
PayPal's Defense and the Legal Fallout
In a statement following the first video, PayPal defended its subsidiary, stating that Honey follows “industry rules and practices” like last-click attribution. However, this explanation failed to appease creators who believe they've lost significant income. The backlash has now escalated to the legal system, with channels like Legal Eagle and GamersNexus leading a new class-action lawsuit against PayPal over its practices.
PRISM Insight: The Honey controversy pulls back the curtain on the often-opaque world of the creator economy and affiliate marketing. It's a case study in how dominant platforms can leverage technicalities like "last-click attribution"—an increasingly criticized industry standard—to potentially shift value from independent creators to themselves. This scandal could become a major catalyst for demanding greater transparency and ethical standards from the browser extensions that have become integral to online life.
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