PayPal Honey

Business practice allegations and lawsuits

In December 2024, YouTuber MegaLag released a video alleging that the Honey browser extension re‑attributes sales made through affiliate marketing programs by modifying affiliate links at checkout, crediting Honey with the sales even when no coupon was applied. This practice was described as a form of cookie stuffing.[15][18] The video further claimed that Honey enables partnered vendors to control which discount codes users see by excluding more favorable codes.[15][18]

In response, PayPal told The Verge, "Honey follows industry rules and practices, including last‑click attribution."[18] PayPal also told USA Today that merchants determine which coupons are offered through Honey.[15]

Following the controversy, Honey lost approximately 3 million of its 20 million users within two weeks of the allegations becoming public.[19] In March 2025, Google updated its Chrome Web Store policies to prohibit extensions from claiming affiliate commissions without providing discounts. Honey then modified its extension to stop claiming affiliate revenue in cases where no discount was applied.[20][21] By May 2025, Honey had lost more than 4 million users, and similar class action lawsuits were filed against competitors such as Microsoft Shopping and Capital One Shopping, which were accused of engaging in comparable practices.[22]

On December 21, 2025, MegaLag released a second video with additional allegations against Honey's business model. The video claimed that Honey scraped private coupon codes and shared them with its user base without the knowledge of the original users, refusing to remove the codes when contacted by businesses. Instead, Honey allegedly encouraged businesses to partner directly with the platform. The video also alleged that Honey collected personalized user data beyond shopping activity.[23]

A third video, released on December 30, 2025, alleged that Honey incorporated code into its extension to evade detection by affiliate networks, which prohibit tools from replacing existing publisher codes with their own.[24][25] By the end of 2025, Honey had lost approximately 8 million users on the Chrome Web Store.[24] PayPal acknowledged the code on January 12, 2026, and announced that they had disabled it.[26]

On January 12, 2026, Rakuten Advertising removed Honey from its affiliate network.[27]

Class action lawsuits

On December 29, 2024, three law firms, including one operated by YouTuber LegalEagle, filed a class action lawsuit against PayPal in United States federal court in connection with the alleged affiliate marketing controversy. The suit alleged intentional interference with contractual and prospective economic relations, unjust enrichment, conversion, and violation of California's Unfair Competition Law.[28] Sam Denby of Wendover Productions and Ali Spagnola were named as plaintiffs.[29][30][31]

The controversy gained further traction on January 3, 2025, when the technology review outlet GamersNexus filed another class action lawsuit through law firm Cotchett, Pitre & McCarthy, LLP. The suit alleged conversion, interference with contractual relations, and violations of North Carolina's Unfair and Deceptive Trade Practices Act.[32][33]

The initial class action lawsuit was dismissed in late November 2025.[34] Federal Judge Beth Labson Freeman said that the complaint had not identified a "cognizable injury"[35] and did "not establish the Plaintiffs were in fact entitled to those commissions pursuant to their contracts with the merchants." The court granted leave to amend the case[36] and the plaintiffs filed an amended complaint in early January 2026.[37]