YouTuber GamersNexus has filed a lawsuit against Honey and PayPal for the alleged affiliate commission scam.
On Tuesday, GamersNexus posted a video on its YouTube channel announcing legal action it’s taking against Honey’s parent company PayPal. The Youtuber is suing for wrongful business practices by “manipulating last-click attribution to ensure that they hijack content creators’ affiliate commissions,” said the legal complaint filed by consumer protection law firm Cotchett, Pitre, and McCarthy.
The lawsuit follows a December investigation from another YouTuber MegaLag who exposed Honey, the browser extension that applies coupons at checkout, of “scamming” YouTubers out of affiliate commissions by replacing their cookie tracking with Honey’s right before users make a purchase. The scheme exploits a practice called last-click attribution which gives referral credit to the last affiliate cookie that was clicked on before a purchase.
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Users with Honey, which pays popular YouTubers like GamersNexus to promote its product, are prompted to click its browser popup to search for coupons upon checkout. If a user decides to buy something through the YouTuber’s site, instead of earning an affiliate commission by recommending and referring a customer to the product site, MegaLag found that Honey was replacing those affiliate cookies with their own when prompting customers to check for coupons.
GamersNexus is leading a class-action lawsuit, filed on Jan. 3, “on behalf of those affected by the actions of what we believe are anti-consumer behaviors that harm not only reviewers but consumers directly,” said Steve Burke, Gamers Nexus founder. Burke also said that payment from the court decision or as a settlement will be donated to consumer rights organizations like Public Interest Research Group (PIRG) and Archive.org.
LegalEagle, another popular YouTube channel is also suing Honey. “This case is about asserting our right to control the use of our content and pushing back against unauthorized practices,” said the LegalEagle lawsuit website. “Honey’s exploitation of promotional codes and links directly affects our earnings.”
In GN’s detailing on its own lawsuit, Burke said that theirs and LegalEagle’s are separate complaints, but that they might combine at some point.
