Two class-action lawsuits have been filed against PayPal by content creators who allege that the company's Honey browser extension has improperly claimed credit for driving sales, thereby taking away affiliate earnings from the creators. The lawsuits, filed in the US District Court in Northern California, seek to address concerns within the competitive affiliate marketing industry, which Adobe Analytics estimates drove 20% of US e-commerce revenue on Cyber Monday.
Affiliate marketing is a practice where content creators earn commissions for inspiring purchases, and Honey similarly earns money through affiliate commissions by offering coupons and deals to users. The controversy arises from the practice of last-click attribution, where the referrer who gets paid the commission is determined by the final click before a purchase. The plaintiffs claim that Honey would unfairly take credit for driving online sales, even when it did not actually help with the sale.
Honey has denied the allegations, stating that it follows industry rules and practices, including last-click attribution, which is widely used across major brands. The company maintains that its extension benefits millions of shoppers by providing savings on purchases whenever possible and helps merchants reduce cart abandonment and comparison shopping.
Legal experts suggest that the plaintiffs may face challenges in proving that Honey's practices are unlawful, as the extension may be the last click a user makes before purchasing, even if it fails to offer a discount coupon. The outcome of the lawsuits could have implications for Honey's relationship with content creators, as the company relies on influencers for its marketing efforts. Despite the legal challenges ahead, the controversy surrounding Honey's affiliate-marketing practices has sparked a conversation within the creator community about fair play and transparency in the industry.