PayPal Faces Lawsuit from YouTubers over Alleged Deceitful Methods
PayPal, the parent company of Honey, a popular browser extension that helps users find discount codes when shopping online, is facing a class action lawsuit filed by YouTubers. The lawsuit accuses PayPal of allegedly hijacking commissions from content creators who use affiliate links to earn money.
Honey, which was founded in 2012 and acquired by PayPal in 2020 for $US4 billion, has become a go-to tool for online shoppers looking to save money. With over 17 million downloads on Chrome, the extension offers real discounts on a wide range of products, from tech and clothing to subscriptions and toys.
The controversy began when a YouTube creator, known as MegaLag, published a video detailing how Honey intercepts and replaces affiliate tracking codes with PayPal’s own code when users click on the extension to apply a discount code. This means that instead of the original content creator earning a commission when a viewer makes a purchase, PayPal receives the commission.
In addition to the allegations of commission hijacking, the lawsuit also claims that Honey may not always offer users the best discount codes available. While Honey’s website claims to find and apply the best coupon code to the user’s cart, the terms and conditions state that the extension “may not always find you the best deal.”
The YouTube community has been quick to react to these allegations, with many creators posting reaction videos and criticizing PayPal for potentially deceiving creators. Some have even called it the “biggest influencer scam of all time.”
The fallout from these allegations has led to a class action lawsuit being filed against PayPal in a Californian court. The lawsuit accuses PayPal of unlawfully redirecting commissions from content creators to itself and overriding original affiliate links with its own rewards program, ‘Honey Gold.’ This program allows users to earn points for purchases made through Honey, even when no discount code is applied.
While the case is ongoing, it has sparked a discussion about the use of affiliate links in online marketing and the potential impact on content creators who rely on these commissions for their livelihood. As more information comes to light, it will be interesting to see how this situation unfolds and what changes may come as a result.
