PayPal's Honey Chrome extension has been caught in a stir recently, as it was found to be scamming users and content creators. The platform aimed to find and curate the best coupon codes for users, and the entire operation was free for the end user. YouTubers exposed the platform and how Honey was exploiting users and content creators, which resulted in a loss of 3 million Chrome users for the company, along with a class-action lawsuit against PayPal.
Honey's deceptive practices have cost it 3 million Chrome users, but would it change its business model?
If you are not familiar with it, Honey promised users that it will provide the best coupons and discount codes. For those who prefer online shopping, this Chrome extension was a life-saver, offering promo codes for free by surfing the internet for the best offers and discounts. It did so without charging customers a dime, and it was a bit strange to see what the company's motto is when it comes to earnings. As it turns out, some under-the-hood mechanisms were involved that allowed the Chrome extension to stay afloat without getting caught for years.
Honey also spent millions of dollars on advertising, which got major YouTubers on board. For instance, we have all seen how Honey sponsored various content creators, including MrBeast, Linus Tech Tips, MKBHD, and many more. The latter explained in his latest video how the Chrome extension has been making money from behind the curtains. As it turns out, Honey has been utilizing and taking advantage of affiliate programs, which pay a referral fee for sales.
This scandalous practice allowed the extension to keep its commission, which should have gone to the content creators. Given how MKBHD and MrBeast get millions of views on their videos, the sheer scale of deception and the losses incurred through the tactics are quite vast. The recent video from MegaLag showed how the Honey Chrome extension would replace a user's affiliate link with their own.
This is ultimately "stealing" the fee from the referral, as the company utilized the platform and audience of the content creator while reaping all the benefits. However, this is not all, as the company has also been working with retailers to intentionally hide better codes and only offer the ones that the retailers prefer. Users have noticed that the extension no longer offers steep discounts on items. With that said, Honey is stealing from two fronts: the end user and the content creators.
As part of the ongoing scandal, an American lawyer and YouTuber, Devin Stone, from LegalEagle, is suing PayPal over its deceptive practices involving the Honey Chrome extension. The creator also called honey a "sleeping leech" as it has rested under the radar for the past few years. The class-action lawsuit was filed on December 29 in California's Northern District Court, and he is seeking "damages, including actual, nominal, consequential, and punitive (exemplary) damages, disgorgement, and restitution" for the creators, and "a permanent injunction restraining." The lawyer is also urging content creators to join the case and has also set up a dedicated website for the cause.
Creators are saying that Honey is a scam. They believe that Honey steals from creators. So, on behalf of creators everywhere, I have filed a class action lawsuit to stop it."
The MegaLag video got 14 million views, and since then, the extension has lost over 3 million users, as per the information obtained from The Internet Archive's Wayback Machine. A lot of users have uninstalled the Chrome extension, which had amassed as much as 20 million users before the video was published. Now, the Honey Chrome extension shows 17 million users. Do you think Honey will change its business model after being caught using deceptive practices? More importantly, would users continue to use the Chrome extension to get discounts? Let us know in the comments.
About the author: Ali Salman is a technology reporter for Wccftech mobile section with a specialized focus on Apple and the intellectual property that drives mobile innovation. He has cultivated a unique expertise in analyzing and deconstructing complex technology patents, translating dense legal and technical documents into clear, insightful reports on future products.
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