YouTuber LegalEagle sues PayPal over 'sleeping leech' Honey extension | TechCrunch
a year ago by fne8w2ah to c/technology
This article credits Legal Eagle, embeds the original, is much shorter to read than an 8-minute video and doesn’t require me to wear headphones. Lemmy is a text based social media so it makes sense to favour text sources. Definitely better than linking to some overloaded Invidious instance which seems to be the norm.
There’s plenty of core social components to Lemmy.
Nothing requires the social components of lemmy to be text only though. Many images, gifs, and videos are shared in comment sections as well. Claiming text only or text-based is incorrect when all media types are available in every facet of lemmy.
Edit: I will add, I do appreciate a text source though... I can get through pages of text faster than I can watch a youtube video at 2x speed. But there are times where the imagery help to clear up some topics as well.
I believe in the right to quote which is also the law in most of the world because of Berne Convention.
I don't like watching videos.
Exhausting. Like the people who used to yell at us for using straws. Your anger is misplaced at individuals.
The very first time I saw an ad for Honey I knew there had to be a catch. Nothing is ever free.
It wasn't immediately obvious how they were going to make money, though. I figured they'd just sell gather and sell user data. I had completely forgotten about affiliate links. But they probably also sell your data for good measure.
I only go there for the free pencils and make my furniture out of the pencils. Checkmate
You can cut down on your pencil quota by also adding free FedEx boxes to your furniture.
Edit: Remembered why I thought of this: http://web.archive.org/...
Do they still exist? In China and Malaysia where I've been living for the last 10 years there are only QR codes at the items that you can scan with the IKEA app.
If you don't want to install the app, all you can do is take photos of the labels, or bring your own pens.
They certainly exist in Ikea here in the Philippines. I've been there a few months ago and the free pencils and paper tape measures (rulers?) are still there and being used.
I pay $100/month for internet access.
Lemmy may be free to access, but certainly not free to host. Am I paying for it personally? No, but someone is.
You also don't see Lemmy paying hundreds of YouTubers and influencers for ad spots.
Lemmy may be free to access, but certainly not free to host. Am I paying for it personally? No, but someone is.
Kind reminder to donate to whoever is hosting your instance. Covering a share of costs increases the chances they will continue running it.
I pay $100/month for internet access.
Which you'd also pay if you used Honey.
Lemmy may be free to access, but certainly not free to host. Am I paying for it personally? No, but someone is.
You also wouldn't have paid to use Honey.
You also don't see Lemmy paying hundreds of YouTubers and influencers for ad spots.
That one, that's a valid argument.
I pay $100/month for internet access.
Irrelevant to the point, but damn that feels so high. I pay something like 30 or 40 euros per month for symmetric 500 megabit, in one of the countries with the highest internet prices in Europe.
Lemmy may be free to access, but certainly not free to host. Am I paying for it personally? No, but someone is.
Well yes, someone is, but my point was, there are loads of examples on the Internet where something truly is free to use and hosted by someone who doesn't ask for anything. There is real altruism to be found here.
You also don’t see Lemmy paying hundreds of YouTubers and influencers for ad spots.
Yes, this is where the difference comes in. When something is free AND the people running it have ridiculous amounts of money to spend on sponsorships and ads... Then you can be sure there's a catch.
Wow, internet is expensive where you are. I pay £28 (about $35) a month for 1gig up/down in the UK.
internet in the states and canada can be so expensive :( i’m lucky that my provider has a program for ppl on disability where we pay $10-$20 CAD/mo. I can’t remember the exact amount, nor what up/down we get right now, but it’s pretty decent!
Capitalists hate competition, and ISPs have it down to a science.
Lemmy may be free to access, but certainly not free to host. Am I paying for it personally? No, but someone is.
"Someone" is paying to host every website. The point is it's free to you.
The catch about Lemmy is that degenerates like me are here
It's not, my point was more that you see a lot of things being hosted on the Internet for free just out of people's goodness and curiosity.
Honey is not one of them. But it's not the fact that Honey is free to use that's the suspicious part. It's the fact that they had an awful lot of money to spend on sponsor spots for a free product/service.
I help pay for my instance to run, nothing is free but there is freeloading. Otherwise someone is else pays for the electricity that powers my server requests as I shitpost on lemmy
It's not, but go look on github. There are so many projects out there that aren't monetized. People just built them for the fun of it.
Hell, the entire KDE software suite is not monetized to the best of my knowledge. They ask for donations, but they don't make a buck off you in any way unless you voluntarily donate.
Lemmy isn't paying out the nose for influencers to hook their stuff. I haven't seen any Lemmy instances advertise at all, much less to the extent that Honey has.
Yes, that's the major difference, but the original comment pointed out you can't have free things without getting assfucked one way or another. You can, but those free things don't spend millions on advertising themselves.
There are so many online companies that do this, like Glassdoor. They are willing to share any information they have about a place until they're paid to remove it. Goes for bad reviews and salary info as much as it does for coupon codes.
There was a video years and years ago where they explained their business model and it has either since changed or they lied. Back then it was that they offered deals through sponsorships or something. I don't remember. It was years ago. What's frustrating is that I remember seeing that video and it definitely made me think it wasn't a scam. Probably had the same effect on a lot of other people too.
Frankly I’m surprised it took this long for anyone to notice they were swapping referral codes. I always assumed that was what was in it for them. Perhaps the extent to which they’ve done it is greater than we knew, but if you have ever heard of referral codes, it seems obvious that this is how such an extension would monetize.
Saved you a click
Among other accusations, MegaLag said that if a YouTuber or other creator promotes a product through an affiliate link, if the viewer has installed Honey, the extension will surreptitiously substitute its own link when the viewer makes a purchase — even if Honey didn’t provide any discounts. That means Honey, not the creator, receives the affiliate revenue for the transaction.
If they'd just been a little less greedy, and only inserted their affiliate link for purchases where none was originally present, and actually provided the service they advertised rather than 'partnering' with merchants to provide worse coupons, they'd probably never have gotten caught and if they had, nobody would have cared. Could have skimmed a significant but lesser amount forever. But no, they had to go full on villain, and here we are.
Having a pressure point against the shops by letting them control what kind of coupons would be shown was probably a big reason they weren't just kicked out of at least some of those affiliate programmes.
That's a fair point, but they could have been up front about it, or at least adjusted their advertising some. They basically told consumers "We'll get you the best deal, and if we don't find one, it doesn't exist", which is a spurious claim anyway, but it surely misled people. They could have just said "We'll see if we have any coupon codes available" or something less committal. There still would have been a lot of value for regular consumers... if you weren't using a coupon code, 5% off is better than nothing and if they weren't being dicks about the referral links, nobody likely would have cared in the slightest.
I mean, yeah, they suck. But honestly, a crowdsourced database of coupons feels like it isn't a good fit for a for-profit company anyway.
Also worth noting that they don't actually find you the best coupons available. They partner with retailers to get an approved list of coupon codes that they will allow. So claims of always finding you the best price are just false.
As much as I enjoy watching LTT content, I have to speak out about how they realized Honey was fucking them and then said NOTHING to their audience or to other YouTubers. I think that is just plain shitty of them and has put a sour taste in mouth with their content now. If they did say something, I apologize. I just haven’t seen it since the only “social media” I use is this singular one, Lemmy.
I don't enjoy watching ltt anymore since a good few years, but I'm still going to come to their defence :)
They discussed dropping Honey on their forum in march 2022: "We ended the partnership with Honey due to the way their service interacted with affiliate links. Essentially, if someone clicked on a affiliate link (For example, one of ours below in the video description on YouTube), and then if they "use honey" and search for a deal, Honey will override that tracking link even if they don't find you a deal. ".
When they defended themselves against the recent accusations, that they didn't make enough noise when dropping Honey in 2022, their defence was that they thought that only creators were disadvantaged (a few 100 people?). They claim to have been unaware that the users of Honey (the hundreds of thousands of LTT viewers) were being disadvantaged as well. They also seemed to be unaware that Honey's behaviour is likely illegal, at least LTT made no mention on the legality of it. https://therecenttimes.com/... Which checks out with their 2022 post.
If they had known that the users of Honey were being bamboozled as well, I'm sure that they would have made a video about it. But making a complaint video to basically say that an ex sponsor was stealing some of their marbles, might have given a bad look. + given more publicity to Honey, which LTT probably didn't want to happen.
While I see your point, I have to say posting about it on their own forums, where a lot of people that normally see their videos will not see it (since I’m sure that not everyone who subscribes to their main channel also would go to their forums…) I still think it’s pretty shitty to not inform your coworkers (other YouTubers) and especially their viewers who only tune in for videos they find interesting (like me). If they’re screwing over content creators, why would you not assume they’re also doubly screwing the regular joes?
Also, look at GamersNexus. They have no issues letting the people who respect them know when a company is up to no good, which in turn garners them even more respect and adoration.
“Hmm. Point out foul play, but lose out on some of that sweet sweet moolah? Nah. Can’t do that. That might make me look advertiser unfriendly!” Is basically what you’re getting at. I think that is a shitty mindset to have when shilling for companies.
Of course, no disrespect towards you, and I absolutely thank you for bringing this to the conversation. I was not aware of it because I am not that deep in the Linus Tech Tips community, I just find some of their videos fun/interesting.
LTT is entertainment, I wouldn't expect in depth reporting from them. They don't have that anal retentive attention to details/all angles that Gamer's Nexus or Louis Rossman have. If LTT made videos where they attack stuff that they think is wrong, then I'd expect them to go on their face more often than not. And attacking large companies with a poorly constructed case, would always come back to bite them in the ass.
Very few people can do the kind of repeated reporting that Gamer's Nexus and Louis Rossman do + stay in business. I can't blame LTT for sticking to what they're good at (superficial entertainment).
"That might make me look advertiser unfriendly!” Not what I was saying at all. I said that in the context of the time it might have made them look unnecessarily greedy to the public + provide free advertising + extra users for Honey.
So the scenario is that they know Honey is losing them money, but it's saving user's money by finding them great deals (since that part of the controversy wasn't known at the time).
And you are proposing they make a video complaining about it. A big YouTuber millionaire telling people "hey, I know this extension is making you money, but please consider not using it because we are profiting off of our affiliate links less when you do and our profits are more important than your savings".
How do you think that would go? We all know how such a video would be received.
You would simply tell your side of the story, and give caution to users of the extension that shady behavior like that is always accompanied by even more shady stuff.
Not really that hard to do, and you gave the info out to people who will dedicate their time (as MegaLag did) into looking into it either for their own interests or to see how deep the rabbit hole goes.
Except it wasn't saving people money. It actually was hiding coupons from users.
Hah, yeah I guess he does own goal to protect others often.
That's an egregious mistake of a logistics employee wrongly asset tagging a prototype, ending up creating a huge controversy. Linus never named the employee and took all the heat on himself even though the situation had nothing to do with him.
Making a big deal out of Honey taking creator's money would again move all the heat on him while warning other creator's. But I think it would go just as bad.
Selling the prototype was only a small part of the issue. They also tried to ruin the brand by testing it on hardware it was explicitly said not to be compatible with, later stating that it was not worth $500 to redo those tests. And then went on to state they had come to an agreement with said company to reimburse them, which turned out to be false. They had just sent their first email in ages to them minutes before posting that statement.
Yes, it was really bad.
I question your assertion that it was purposefully done as a secret conspiracy to ruin a random brand. Don't attribute to malice what can adequately explained by stupidity.
No, they weren't trying to ruin the brand, they were trying to make a YouTube video, made a bad job with multiple compounding mistakes, and ended up hurting the brand without that being their intention.
That one looks like an honest mistake.
The obvious contempt linus showed for the sloppy prototype and its extortionate cost is an aggravating factor however.
He said on the WAN show that when they dropped Honey a few years ago, the news was going around all over creator circles and a lot of other creators dropped them then too. And they didn't make a video because at the time only the affiliate yoinking was known, and the audience would probably call them shills for making a video about how they're losing money due to their audience saving money.
I don't think his defense is 100% airtight, but it's useful context.
I mean, is it saving users money though? It’s not, the charge is that it’s just taking other affiliate code out of the link and replacing it with its own. And just doing it to small creators? I don’t know that much about it, maybe that last part isn’t true. But it’s not saving them money that’s the problem, but replacing affiliate links with their own. And they’re saying that it’s just that they were the “last click,” even if it was from an affiliate site. Meaning they probably put it in their code somewhere to briefly load honey looking for “deals,” meaning they were the last one to redirect the click and then they get the money.
Will be interesting to see how they were doing it.
Honey would look for coupom codes, and sometimes it would find them, it wasn't always, but also wasn't never, so yes, they were "saving money" for the user as far as people knew at the time. After MegaLag's video we know that the whole "find all available and working coupons to guarantee the best deal" was horseshit, and they were in partnership with business controlling the whole thing, but back when LTT and other creators dropped Honey, that part wasn't known yet, just that they poached affiliate links. Which is very scummy, but likely not illegal.
I dunno. Because when creators are pushing those affiliate links, they’re offering discounts. That’s why their users go there. And if honey was giving them a bigger discount, I’m sure that’s not illegal. But if it was just poaching the 10% 94 whatever the creator was already offering, giving them still 10%, but taking that “last click” because it checked?
Who knows, the company is bigger and has PayPal at its back. So might makes right in US law. I’m sure that will be the outcome. But I’ve been surprised before.
Linus also repeatedly says LMG is not your friend. He knows he fucks the audience over sometimes and wants to absolve himself of it but he's got 100 people on payroll that he needs to capture the surplus labour from.
I think they talked about it on WAN show and said that other creators already knew which is why you haven't really seen Honey ads anymore even before the recent video came out and they didn't know about the consumer issues so they didn't think it warranted a video.
Tell that to all the creators who are coming out and screaming that they never knew and are anxious to join the class action lawsuit that Legal Eagle and Wendover productions is bringing.
Linus is really, really shitty at responding to criticism. I don’t think it’s malice, it just didn’t occur to them.
He should just be upfront and say “you know what? We should have done better here”. That’s it.
I don’t watch the WAN show because it’s not really my type of content. Haven’t they addressed concerns before on their main channel, or am I mistaken? If they found out Honey was scamming them, and just assumed other YouTubers knew or their audience, why not just make a quick video about it with a more in depth talking about it on the WAN show?
This gist of it from the WAN show was this:
- They were unaware that it was intentionally not looking for the best deals (thus, scamming the consumer)
- They stopped advertising Honey because of the referral hijacking
- A ton of creators knew about it, and had already dropped Honey (people just talked about it via DMs, not publicly)
- This all happened when YouTubers were getting shit on for even doing ads/sponsors, and they didn't want to make a video that was basically "stop using this thing that saves you money because it takes my money" (see first point)
Again, I must bring the point that you can still say your side of the story (here is what we found out about Honey) and caution users of the extension to be wary of not only this shady business, but that who knows what else they might be doing.
Do people really think that someone with the platform as big as Linus Tech Tips shouldn’t bring awareness to such topics? Why not? Especially if you were once shilling for them??
I'm trying to remember if they have, I feel like most of the addressing of problems with sponsors has either been done on the forums or on the WAN show. And the reason why they probably don't do that unless it's like a really bad consumer affecting thing is because of how big LTT is now making a quick video isn't really as easy as for smaller creators. It's the classic problem of smaller companies or creators being much more nimble and agile to react and make quick videos about things compared to a bigger company like LTT that has writers that have to write the video, then they have to schedule a time to film it and since Linus would probably host would have to wait for him to be available, then it goes off to an editor to be edited, a thumbnail artist makes a thumbnail for it, and it's slotted into the upload schedule which already has a number of other videos in it. It's just a much longer and more expensive process that makes creating a quick video not as much of an option anymore, especially considering YouTube will punish your future videos if you upload a video that doesn't do as well. I still think they should have talked about it or atleast looked into it a bit more and realized there was a lot more going on but I understand why they didn't.
Spineless tech tips
I'm happy to be corrected, but my understanding is this all stems from a MegaLag video published a month ago. There would be no need for LegalEagle to republish all the claims and it understandably takes some time to file suit. In short, the info was already out there for everyone to see.
You are absolutely correct. I hadn’t thought about that. I will try to use the full name first from now on and then the acronym afterwards to make it easier for all to know what is what.
Thank you for bringing that to my attention!
I watched the MegaLag video, and I may be mistaken, but he is the one that said LTT never said anything to anyone and just let it go. Thats what I’m referring to.
Honey has in its terms of services that you accept not to take part in a class action lawsuit and favor arbitration. It seems like these kind of clause is enforceable usually so I'm curious to see how Legal Eagle will navigate the issue.
Edit: Either the creators sue Honey and they will argue it is not illegal to poach affiliate links because they follow the "last click" rule that is standard (it's just that they pushed it to the extreme).
Or its the users that are scammed because they were told the best coupon would be used. But if it's the users, they are under the EULA and should have to comply with the no class action rule.
I'm not a lawyer but this is how I understand the setup for this trial to be.
According to Legal Eagle's video, Honey could be pocketing affiliate link money from creators that had never even anything to do with them.
It's installed on viewer's side, so it makes sense.
I'd also say there are probably limits to what you can enforce arbitration for, especially if you outright lied to your customers, but I am not American and I have no idea how irredeemably fucked up your customer protection laws are.
That's the thing PayPal Honey is saying they are respecting the "last click" rule and in their eyes there is nothing illegal in that.
Even if the creator as nothing to do with honey they are saying the last click is in honey just before checkout so they get the money. I understand this is a terrible excuse but it seems that's the defense they will follow. Basically they are hiding behind that stupid last click rule and using it to justify it's perfectly legal.
Basically Honey says "we just strictly comply to a standard practice in affiliate links".
Something I wonder is how would it even be possible for vendors to ignore PayPal is doing something fishy.
You got a guy who's job is to monitor who is getting their affiliate money. He sees PayPal collecting millions of affiliate money.
The other players in this game (of affiliate link) knew very well that honey was doing something fishy. Why didn't they contest it?
Because they were doing the same kind of "last click" bullshit. If that was so unfair there would be a trial already. They all followed this stupid rule and the megalag video talks about it.
The fact that Linus Tech Tips knew and we are supposed to believe the rest of the affiliate links mafia didn't see a thing?
So Disney had an arbitration clause in a eula that a user agreed to when they signed up for a streaming trial service and never ended up subscribing. When he died of food poisoning at a restaurant at one of Disney's amusement parks, his widow looked to be unable to sue the park over it, because he had agreed to that eula by signing up a couple years before.
It was generally perceived that the clause would have been enforceable in that fucked up situation, but Disney backed off when the word got out that the lawyers in the trial were pushing that argument, and they waived the clause. But in that instance, it was never actually ruled on, and many people seemed to think that it was going to be enforced. That's how fucked the system is when it comes to these clauses.
Disney hoped the clause would be enforceable. At least part of the reason Disney settled out of court was because they didn't want to challenge that assumption.
You can put whatever clauses you want in a contract. The law still trumps those contracts if it ever comes to enforceability.
I know that story. It's a lot more nuanced than that.
Thing is, Disney barely had anything to do with the restaurant itself (they're basically the restaurant's landowner). And the only thing on which they could attack Disney was to point that the restaurant had a description on Disney's website... which is part of Disney online services, and subject to their terms of services.
So yeah, grasping at a clause from an old Disney+ subscription is bullshit, but the claim honestly did not make a lot of sense to begin with. The restaurant itself should have been sued to hell, even more so because apparently they reinstated they were allergy compliant several times when asked.
You aren't wrong, but the usage of the clause the way it was being used was definitely beyond the pale. I don't think Disney was liable for the restaurants malfeasance, but that lack of responsibility should have rested on the facts of the association or lack thereof, not on some bullshit eula clause for an unrelated product.
Youtubers who had their affiliate links hijacked aren't subject to the EULA.
A couple things, some of the plaintiffs listed appear to be business, and not users anyway. Regardless, I cannot imagine it would be difficult to find someone who made money via affiliate links and also never used honey
Then it remains to be proven that it is illegal to poach affiliate links like that. Because Honey says they just follow strictly the "last click" rule that is common practice in the field.
It's bullshit but if that bullshit rule is indeed the standard practice then it will be hard to fight.
Could it not be seen as a deliberate deceit to avoid adequate compensation as per any sponsorship agreement though? Such practice can't be legal surely?
Even if they tried to weasel it into the terms of a sponsorship agreement one would assume it would be considered null as it goes against the very purpose of the contract?
Feel like Legal Eagle wouldn't waste their time and resources on a class action if they didn't have strong enough grounds for a fight? (And would instead make a video explaining why it would be pointless to do so)
Technically, there is not necessarily a partnership in a situation where an affiliate link was stolen. Any user with the extension would see his affiliation given to PayPal.
Also, I can't help but think it will be very difficult to account for how much money was "redirected" by Honey. The creator would need data from YouTube that I don't think is logged for much time. So you wouldn't know who clicked and when and even after that I thing the vendor of the product would need to be involved also.
Who knows what LegalEagle intends to do, they shouldn't be too clear on their intent and keep their strategy secret. Maybe they hope for some kind of settlement because I think this is more damaging in term of PR than it will ever be in terms of fines. It's like the recent case of Apple, they choosed to pay to expedite the process but never admitted guilt?
Again I'm no lawyer let's trust Legal Eagle and see where it goes. But PayPal will be a strong case for sure.
MegaLag has other videos coming. I would assume Honey is also selling a shit ton of purchasing behavior data
I always assumed that was their business model. Can imagine that car content and shopping habits are valuable af.
About that is it normal that the other videos are not released?
I feel like he is losing the momentum he had with that video series and the more time he waits the more likely the gag orders or retaliation from PayPal.
What if Megalag can't release the next videos because a horde of lawyers is already on his back?
Surprisingly I think Honey decided not to be able to sell user data (Ludwig sponsorship's with honey was pushing this).
Basically they were making so much money on affiliate links they probably thought it wasn't worth risking to be caught for some privacy reason.
I could see the strategy making sense to release something as the current cycle dies down. His previous expose of the color blind glasses happened over several months
Here is another video on the topic: https://youtube.com/watch?v=ItiXffyTgQg. This individual is from the law firm working with Devin. He explains that this actually is likely to limit suits from consumers, but not for the class taking action, the creators.
I agree that Honey is a sleazy extension, but should I be worried that if they lose, it will set a bad precedent? From the video, the Honey extension works by injecting a Honey referral code into all online shopping transactions, possibly overwriting whatever influencer referral code the user was under. If Honey loses, the court decision is likely to say that an extension creator is liable if they tamper with referral codes and tracking links.
This will be a problem for privacy extensions that strip out tracking cookies and referral URLs, since they are also messing with influencer attribution, though not for profit but at the request of the user.
Not a lawyer but I think the fact that honey profited, like, a lot from this is a key factor. From my understanding it's hard to say what they didn't wasn't straight up theft. What's more, they lied about what they were doing so the consumer was unaware of the 'product' they were getting. So while I get your concern, I wouldn't be too worried about precedent here. It's less 'this should be made illegal!' and more 'they def committed several actual crimes'
In such case, my opinion would be that referal stripping should be OK. It is the customer choice, even if automated, and the extension clearly tell what he does. You can see it, using the metaphor used in the video exposing the problem, as just not giving the referal card the store salesman gave you.
In the case of Honey, they do it behind the customer back, and the original video metaphor is quite right. They could at least ask i f the user wish to attribute the sale to Honey instead of whatever influencer/website originally pointed you to the product, but they don't.
I'm thinking this lawsuit will be more about how they wronged creators, and less about how they wronged customers. I don't expect there to be any justice or concern for the customers who were wronged. Therefore, I agree with TAG, I would worry that them losing would set a bad precedent, and possibly make it so that tampering with referral codes, tracking links, etc isn't allowed anymore because it hurts creators and sellers/companies, and thus that could outlaw adblockers entirely by extension which would not be great.
That's like worst-case scenario, though, I don't necessarily expect that to happen, but I think it's possible.
The issue here isn't that the tracking link has been tampered with, but that it was done without the user's informed consent.
Honey doesn't advertise how it makes its money to consumers; it is just a fancy plug-in that could save you money.
That is not the issue at all. This lawsuit has nothing to do with user of honey, only on behalf of creators and affiliate marketers. Langley in part because users of honey signed a class action waver and makes it a sticky issue to also include them in the lawsuit.
One of the lawyers taking part in it explicitly points this out: https://youtu.be/ItiXffyTgQg?t=182
Nah, honey was marketed as a coupon tool without mentioning the referral manipulation it did that is its actual business model. Those privacy extensions just need to call out that they remove referral trackers too and everything is fine with them.
Not a lawyer and haven't seen the lawsuit but I've watched a lot of legal eagle and other lawyers and I suspect it's not about them manipulating codes. I also doubt this is the sort of case trying to set a precedent in any legal sense.
Likely it's just boring fraud because they deceived content creators and users with lies to make money.
A different company doing the same thing but being honest might be unethical and terrible but probably wouldn't be sued.
Not an issue because FOSS
I am up to speed on this little drama, but it’s still unclear to me what they’re suing over.
Yea, Honey effectively took over affiliate links. And yes, they were obviously shady (I never used it, because I did not know how they made money). But I don’t quite understand how other people trying to make money from affiliate links have a real claim against them.
Or is this just a case of the influencers realizing they have the moral high ground and the public’s ear, and wanting a pay out?
It's fraud. They publicly claimed, point-blank, to do a certain thing for years, and were instead doing the opposite, in the interest of making more money. The affiliate link thing is only one of several points that they're suing over. The far more egregious one is that they don't actually "scour the internet to find you the best coupons" They will actively hide better coupons that they know about, if marketplaces pay them to, and still tell you in the browser "this is the best coupon."
It's more than that, at least from a EU perspective. Don't know what is legal in the US, but manipulating URLs in an obviously malicious way and without the user's explicit knowledge and consent would be highly illegal here.
Are they modifying URLs?
As far as I know they steal cookies but don't change the URL.
Also, I think the bizarre market practice of "last click takes attribution" seems to be also common in EU.
Unfortunately just because it's shady doesn't make it immediately illegal even here in EU.
And the response from PayPal Honey shows they want to fight it in court. Which don't think they would do if they thought it would have been considered highly illegal.
They found a loophole and abused it to steal creators (and users).
I just checked the original video. It works a little bit differently than plain URL replacement. They open another tab in the background and then send a manipulated URL to get the affiliate cookie set to their own. Guess it's for the courts to decide if that is a legal practice or not. But to me it seems that the malicious extension sends a manipulated URL to the server pretending to do that on user's behalf, without his knowledge. That is classic malware behavior.
Among other accusations, MegaLag said that if a YouTuber or other creator promotes a product through an affiliate link, if the viewer has installed Honey, the extension will surreptitiously substitute its own link when the viewer makes a purchase — even if Honey didn’t provide any discounts. That means Honey, not the creator, receives the affiliate revenue for the transaction.<<
Are they modifying URLs?
Based on the MegaLag video, it looked like they're opening a new tab with their own affiliate link, preserving cookies to ensure checkout can complete, then closing the original affiliate link tab.
The YouTubers can only sue for actual damages THEY realized.
As the class is for content creators that partnered with Honey, it can only be for the affiliate links.
Users will need to sue separately, either individually or as a different class. My money is on them having a forced arbitration clause, so direct lawsuit will most likely be out of the question.
It's not just youtubers. It's anyone who uses affiliate links. Online ads use affiliate links.Things like Amazon Smile used affiliate linking for charity fundraising.
And since Honey was jacking links class action is the only way for them to really do it. No individual affiliate can point out their individual loss through Honey because Honey erased their links.
That means the class action needs to go after all affiliate revenue Honey has ever made.
After reviewing the actual legal filing, you're correct. I somehow missed that.
All persons (corporate or individual) in the United States who participated in an Affiliate Program with a United States online merchant and had affiliate attribution redirected to Paypal as a result of the Honey browser extension.
Thanks for the clarification.
The other lawyer in the case, Attorney Tom made a video going over what they are sueing for and some of the misconceptions.
https://youtu.be/ItiXffyTgQg?feature=shared
People have a claim due to lost profits and potentially missed business opportunities.
Let's Youtuber A had a sponsor affiliate and a spoken ad spot. Creator makes 2k for the sponsor read and 2% every time someone buys something via link. Honey swoops in and steals the affiliate link (regardless if the user got a coupon or not). The creator no longer getting the 2% and skews the success of the ad.
The creator's ad performance (ad to finished transaction) is down, so sponsor lowers the commission to 1% and 1.5k for the next video. Enough people use honey and the metrics are bad enough the sponsor doesn't renew contract with the creator.
On the consumer end, which due to arbitration clauses the lawyers aren't actively pursuing (at this time) (see linked video).
There's a legal precedent that cookie stuffing is considered wire fraud
There's moral precedent that being a greedy lying cunt can get your privilege to life revoked
I hope we will see.
The video has links in the description to the complaint.
[Here it is on Court Listener](https://www.courtlistener.com/...
Edit: To your other point. Why should Honey take money away from actual referrers when they didn’t even provide a discount code?
There aren't creators you like and think they deserve some of the cut? If there isn't an increase in price, then that just means less of the money is going to the business, and some of it is going to a creator you enjoy.
I'm not buying anything recommended by creators, unless from their own shops in which case they get the full revenue either way.
If there is a product they recommend that I might be interested in, I'll research prices and guaranteed find a better deal elsewhere.
I don't use subscription services at all save for two very specific use cases and don't play games, so all the vpns, online academies, website business, mmorpgs and whatever they are pushing really doesn't phase me. If (and that's a big if) they even make it through sponsorblock in the first place.
Everything you listed are common sponsorships. I have never bought a YT sponsorship, so there's no argument there. But affiliate links are more than just those sponsored posts. Amazon is a commonly used affiliate program. For example, someone might link to the tools they use and like. I watched a carpenter who linked to the tools he used, and it was also an affiliate program. He wasn't paid by anyone to link them like a sponsorship, he was just sharing in his experience what tools he likes best. If I trust his judgement in tools, and want to buy the same ones, assuming camelcamelcamel shows it a good price and checking around doesn't find it cheaper, why wouldn't I want them to get a cut of that purchase?
I dislike affiliate links from a privacy perspective. I don't want to be tracked via my purchase to some creator's channel that would link my person to certain interest groups. I'm breaking those chains wherever there is a chance, usually by manually copying links and cutting off the tracking bit, or if it's a URL shortener like bit.ly and the likes, I'll open it in a private window and then copy the resolved URL minus tracking bit into my main browser window.
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Before I even clicked it I knew there would be no real journalism involved. It's just parroting the video the LegalEagle put out, so if you'd rather give your click to the creator, just watch the Youtube video, and don't bother with the techcrunch "article".
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