The gaming-focused YouTube channel, GamersNexus, has initiated a group legal action against PayPal Holdings, Inc., due to the activities of Honey, a firm that PayPal took over in 2012.
With Honey, you can swiftly install its browser extension in a matter of seconds, allowing you to shop as usual. When it’s time to pay, Honey will automatically search thousands of online stores (over 30,000 to be exact) for valid coupon codes and apply them at the checkout for you.
The lawsuit claims that the defendant has intentionally taken property (specifically referral commissions and fees) belonging to the class members, which is known as “conversion”. Additionally, it alleges a breach of contractual obligations, or “tortious interference”, by a third party (PayPal through Honey), who interfered with contracts between class members and sales websites. Lastly, it accuses the defendant of violating North Carolina’s Unfair and Deceptive Trade Practices laws, based on these first two allegations.
YouTube content creator MegaLag, recognized for his social investigations and experiments, recently published an investigation on Honey’s business practices. This probe, which has garnered over 16 million views in less than a month, claims that the Honey browser extension has misappropriated millions of dollars from influencers who were compensated to endorse their service.
Lawsuits against Honey, a service, are multiplying, with GamersNexus being the latest to join. Previous lawsuits have been filed by influencers such as Sam Denby, Elizabeth Zharoff, Sean Cannell, Andru Edwards, Eli Silva, Ashley Gardiner, and Claudia Young. It’s important to note that this list is not exhaustive; there may be more individuals planning to take legal action. Notable figures like Mr. Beast and Linus Sebastian (Linus Tech Tips) have also endorsed the service.
It’s common knowledge that our online activities are being monitored. Retailers collect data about us to maximize their investments for the next sale, and they’re interested in understanding the series of factors that ultimately led to your purchase decision.
In the realm of digital shopping, I’ve come across an intriguing concept known as “last click attribution.” This principle essentially means that if I share a referral link from someone like Mr. Beast and you end up making a purchase using that link, he could potentially earn a commission. Now, imagine you’ve been considering a product for quite some time, and in your journey, you’ve clicked several affiliate links. Guess what? The retailer will reward the commission to the person who shared the link at the very last click before your purchase. It’s not a flawless system, but it seems to be the most economical choice available.
Here is how the alleged practices worked:
As a passionate cinephile, I team up with an influential figure to endorse a fantastic service. Folks like you then proceed to install the add-on right onto your web browsers, making our movie-loving experience even more seamless and enjoyable!
Whenever a user visits a store that integrates with PayPal Honey, the web extension automatically scours the internet for available discount codes and applies them to the user’s purchase.
Simultaneously, PayPal Honey gets inserted into the buying process as the final referrer, allowing them to claim credit for the sale (last click attribution).
In this scenario, when a user makes a purchase through an influencer’s referral link, the retailer pays the commission that would have gone to the influencer to PayPal instead. This occurs regardless of whether PayPal Honey offered a valid coupon for that specific transaction.
In the coming months, the stories of these lawsuits will be ones to watch.
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2025-01-17 14:55