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Honey, a browser extension and coupon site owned by PayPal Holdings Inc. since 2019, is being accused of deceptive practices that potentially harm both consumers and content creators.
The accusations come from YouTube creator MegaLag, who claims in a recent 23-minute long YouTube video that the popular extension engages in unethical practices such as intercepting affiliate commissions intended for influencers and selectively promoting discount codes from its business partners over potentially better deals.
MegaLag’s investigation also alleges that the manipulation not only deprives content creators of fair earnings but also misleads consumers, undermining the platform’s promise of delivering the best discounts.
The first accusation involves Honey’s alleged interception of affiliate commission links shared by influencers and others. It’s accused of replacing affiliate tracking codes with its own during the checkout process, effectively redirecting the commission to itself. If true, Honey essentially is stealing the revenue streams of content creators who rely on affiliate marketing as a primary source of income.
The second accusation from MegaLag is that Honey prioritizes discount codes from its business partners over more substantial savings available elsewhere. MegaLag’s investigation claims that the extension’s algorithm is designed to promote codes that benefit Honey’s affiliates rather than presenting the best available deal to users and, in doing so, misleads consumers, as the platform markets itself as a tool to maximize savings during online shopping.
PayPal and Honey are yet to respond to the accusations directly, but a spokesperson for Honey told Fortune that “Honey is free to use and provides millions of shoppers with additional savings on their purchases whenever possible” and that “Honey follows industry rules and practices, including last-click attribution.”
Honey does make much of its money from affiliate commissions, which it inserts on web pages such as Amazon.com Inc. and other retailers. But intercepting existing affiliate links for its own profit is another matter. Though perhaps not illegal, there’s certainly a strong moral dimension.
But if Honey is truly not presenting the best deals in favor of business partners, that’s a much more serious accusation. If true, Honey could be breaching various U.S. laws such as the FTC Act Section 5, covering unfair or deceptive practices, the Consumer Review Fairness Act and the Lanham Act for false advertising.
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