Honey’s Business Model: A Constant Adpocalypse for Creators

Just a little over a week ago, YouTuber MegaLag dropped a bombshell video exposing Honey, a popular coupon-finding browser extension. The accusation? That Honey was stealing content creators’ commissions by replacing their affiliate links with its own right before checkout.
Now, LegalEagle, also known as Devin Stone, is leading the charge in a class action lawsuit against PayPal, the owner of Honey. The lawsuit includes YouTubers Sam Denby (aka Wendover Productions) and Ali Spagnola as the main plaintiffs. PayPal acquired Honey for a staggering $4 billion back in 2020 when the extension was pulling in around $100 million in revenue per year.
According to Stone, if MegaLag’s claims are true, this situation is like an “adpocalypse going on all day every day” that creators were completely unaware of. It’s not just creators who rely on affiliate commissions that are affected. Those who had their affiliate links tampered with during the checkout process lost out on potential earnings from sales they generated. This extends to lost sponsorships as well, as ad spots may not have appeared to convert as expected.
But even creators not involved in affiliate marketing or sponsorships are at risk. Stone explains that if Honey is indeed diverting attribution that should go to creators, it could impact all advertisers on social media platforms. The lawsuit, filed on December 29 in the United States District Court for the Northern District of California—San Jose, has two main objectives: obtaining monetary damages for revenue that should have gone to creators and preventing Honey from engaging in these actions in the future.
Both objectives are equally crucial, and Stone is working alongside a team of attorneys across Washington D.C., California, and the Midwest to pursue them. He hopes that a ruling in favor of the plaintiffs could lead to investigations into other companies potentially employing similar practices, such as Karma, Capital One Shopping, and Pie, a new venture by Ryan Hudson, co-founder of Honey.
Stone urges creators who believe they have been affected by Honey’s actions to contact honeycase@eagleteam.law. The plaintiffs for the lawsuit, Denby and Spagnola, represent savvy creators who rely on affiliate income to support their work. Stone believes that Honey may have swindled billions of dollars from creators since its acquisition by PayPal and looks forward to uncovering the true extent of the damages during the discovery phase of the case.

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