PayPal’s Honey browser extension allegedly overrides affiliate links, cutting creators out of commissions they’ve legitimately earned. Content creators can stay informed, track their link metrics, and work with sponsors to safeguard their revenue streams.
by LawInc Staff
December 31, 2024
When affiliate links get replaced by a third party’s tracking code, countless creators can lose out on well-deserved commissions and future brand deals. In a new class action complaint (Wendover Productions, LLC and Businessing, LLC vs. PayPal, Inc.), two popular online content companies allege PayPal (via Honey) intentionally interfered with their contractual and economic relationships.
Below is a comprehensive look at the key points from the lawsuit, the potential impacts for affected content creators, and what to watch out for if you use affiliate programs or share sponsored links with your followers.
1. The Parties Involved
- Wendover Productions, LLC & Businessing, LLC (Plaintiffs): These companies produce online content (e.g., popular YouTube channels, large social media accounts). Their revenue partly depends on affiliate commissions and sponsored content deals.
- PayPal, Inc. (Defendant): Well-known for payment processing services. Acquired the Honey browser extension in 2020 to offer consumers “automated discount codes” at checkout.
- Honey (Browser Extension): Allegedly intercepts or replaces affiliate links at the final “checkout” step, crediting purchases to Honey’s affiliate link instead of the creators’ links.
Example Scenario:
- – A viewer clicks on a YouTuber’s affiliate link for Nord VPN. The plan costs $60.
- – At checkout, the viewer sees a pop-up from Honey offering a discount code. They click it.
- – Honey’s affiliate code overrides the YouTuber’s affiliate link. The YouTuber gets zero commission credit.
2. Key Allegations Against PayPal/Honey
- Intentional Interference with Contractual Relations: PayPal’s Honey is accused of inserting itself into existing contracts between creators and merchants, preventing creators from collecting their rightful commissions.
- Intentional Interference with Prospective Economic Relations: Because Honey obscures how many sales truly originated from a creator’s channel or affiliate links, sponsors may see artificially lower performance stats. This can degrade brand relationships and hamper future contracts with content creators.
- Injunctive Relief Sought: The plaintiffs want the court to stop PayPal from continuing these practices. This includes a request for a permanent injunction preventing Honey from auto-replacing affiliate links.
How to Proceed If You’re a Creator:
- – Track Discrepancies: Keep detailed records of your link clicks (via services like Bitly, Pretty Links, or your affiliate platform) and compare them to sponsor payout reports.
- – Communicate with Brands: Alert sponsors if you suspect that final attributions or conversions are lower than your raw click data suggests.
- – Stay Informed: Watch for updates on this class action. If the lawsuit is successful, there could be potential compensation for similarly situated creators.
3. Inside the Class Action Complaint
- Class Definition: All individuals (or entities) who, within a certain time period, used affiliate links to generate revenue but had their links replaced at checkout by Honey’s code.
- Claims Exceeding $5 Million: Under the Class Action Fairness Act, the plaintiffs allege that, cumulatively, creators lost millions in affiliate commissions—enough to clear the threshold for federal jurisdiction.
- Common Questions of Law & Fact: Did PayPal systematically override affiliate tracking? Did these overrides cause direct monetary harm to creators?
- Potential Damages: Plaintiffs seek actual, consequential, and even punitive damages for what they allege is willful, knowing interference.
FAQs on the Class Definition:
- Q: What if I only had a few affiliate links replaced by Honey—can I still join?
A: Potentially yes. Plaintiffs say any overshadowed affiliate sale may qualify. The exact class details will be decided later by the court. - Q: What if I never used “Honey” personally?
A: It doesn’t matter. The customer’s browser uses Honey at checkout, interfering with your link. You do not need to have installed Honey.
4. Why This Lawsuit Matters to Content Creators
- Erosion of Trust: Brands rely on accurate data to measure ROI. If affiliate performance looks weak, content creators might struggle to negotiate future deals.
- Financial Consequences: Every time Honey supplants a link, creators lose immediate commissions and proof of successful conversions.
- Industry-Wide Precedent: A successful lawsuit could force third-party browser extensions to stop auto-overriding affiliate tracking—shaping the future of e-commerce tools.
- New Tech Solutions: If the courts rule in favor of the plaintiffs, we may see new protective measures for content creators, such as “locked” affiliate attribution or stricter extension guidelines.
Real-World Creator Examples:
- – Travel Vloggers: Earn affiliate commissions selling travel gear. The brand sees only half the expected conversions (since Honey replaced half the links at checkout). The sponsor assumes the influencer underperformed and does not renew the contract.
- – Fitness Influencer: Promotes supplement lines. The influencer’s monthly check is consistently lower than predicted, leading them to suspect missing commissions. Honey’s extension is found to override half their affiliate codes on the brand’s website.
- – Tech Review Channel: Recommends software products with unique discount codes. The brand reports 90 signups, while the influencer’s link data shows 200 clicks. Discrepancy is traced to Honey’s code insertion at checkout.
5. Legal Concepts in the Complaint
| CAUSE | DEFINITION | WHAT PLAINTIFFS MUST PROVE |
|---|---|---|
| Intentional Interference with Contractual Relations | Wrongfully preventing a party from fulfilling an existing contract, or making that contract harder to perform |
|
| Intentional Interference with Prospective Economic Relations |
Wrongful acts that disrupt or diminish future business expectancies (not just existing contracts) |
|
| Injunctive Relief | Court order demanding the defendant stop doing (or start doing) something |
|
FAQs on the Legal Claims:
- Q: Is it illegal for a browser extension to offer a coupon code?
A: No, but replacing an existing affiliate link without user transparency, and thereby hijacking a contractually protected revenue path, can rise to “wrongful” interference. - Q: How can plaintiffs prove lost revenue from link replacement?
A: Affiliate platforms track link clicks and conversions. Discrepancies between click data and actual paid commissions can show that commissions went elsewhere—allegedly to Honey/PayPal.
6. Potential Outcomes
- Settlement & Compensation: If the class is certified and the plaintiffs prevail (or negotiate a settlement), content creators may be entitled to monetary recovery for lost commissions or brand deals.
- Behavioral Changes: The lawsuit could lead to stricter rules about how coupon extensions handle “last click attribution.” Some platforms might adopt clearer disclaimers or allow creators to “lock” links.
- Prolonged Litigation: PayPal may deny wrongdoing and fight vigorously. Class actions often take months (or years) before final resolution, with multiple motions and possible appeals.
- Industry Ripple Effect: If the court finds PayPal/Honey liable for wrongful interference, other coupon or deal extensions could face similar litigation or quickly adjust their business models to avoid risk.
How to Proceed If You Think You’ve Been Affected:
- – Check Your Analytics: Compare your affiliate platform’s link clicks to your sponsor’s reported conversions—any big gaps?
- – Document Everything: Keep emails, screenshots, or spreadsheets of your affiliate stats for each campaign.
- – Consult Legal Counsel: If you think you qualify for the class, talk to a lawyer about your potential claims or look out for official class notices once the lawsuit progresses.
7. Test Your Knowledge: Class Action & Affiliate Interference
Quiz Questions
- Which cause of action in this lawsuit covers “existing contracts” being disrupted?
A) Intentional Interference with Prospective Advantage
B) Injunctive Relief
C) Intentional Interference with Contractual Relations
D) Unjust Enrichment - What is “last click attribution”?
A) A tool to speed up checkout
B) An industry model that credits the final link clicked for the sale
C) A new brand deal metric
D) Irrelevant to affiliate marketing - Why could “Injunctive Relief” matter for content creators?
A) It forces the extension to pay triple damages
B) It might permanently stop the extension from overriding affiliate links
C) It only helps the defendant
D) Injunctive relief is never granted in class actions - Why might the “Prospective Economic Relations” claim be crucial?
A) It applies to relationships with brand sponsors after the current contract expires
B) It only protects existing, signed contracts
C) It’s limited to non-profit organizations
D) It doesn’t apply in California - What is one possible outcome for creators if they win the case?
A) No changes for coupon extensions
B) Laws making affiliate marketing illegal
C) Potential monetary recovery or changes in how affiliate cookies are used
D) Creators must give full refunds to customers
Answer Key
- 1. C) Intentional Interference with Contractual Relations
- 2. B) An industry model that credits the final link clicked for the sale
- 3. B) It might permanently stop the extension from overriding affiliate links
- 4. A) It applies to relationships with brand sponsors after the current contract expires
- 5. C) Potential monetary recovery or changes in how affiliate cookies are used
Summary & Final Thoughts
When big tech tools like Honey disrupt affiliate attributions, the ripple effects can undermine your hard-earned content creation revenue. This proposed class action alleges that by overriding links at checkout, PayPal/Honey effectively steals commissions from the very creators who drive sales in the first place. If the court grants relief or issues an injunction, the affiliate marketing world could see significant changes in how browser extensions handle last-click attribution.
For now, creators should keep an eye on this lawsuit’s progress, maintain careful records of affiliate metrics, and be proactive in educating both themselves and their brand partners about possible link overrides. Once resolved, this case may dramatically shape the boundaries of “fair play” in the booming world of sponsored content and affiliate marketing.
Disclaimer:
The information above is not legal advice. Each situation is unique. Consult with a qualified attorney if you believe you’ve been affected. The details of this lawsuit may evolve, and the final outcome cannot be predicted with certainty.
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