Creators Ali Spagnola, Legal Eagle, and Wendover Productions have filed a lawsuit against PayPal, accusing the company of using its Honey browser extension to redirect affiliate commissions. The lawsuit, representing a class of creators rather than consumers, claims PayPal Honey “effectively stole” payouts by replacing creators’ affiliate tracking codes with its own.
Devin Stone, the lawyer behind Legal Eagle, announced the legal action on his YouTube channel. The suit seeks damages and an end to Honey’s alleged affiliate-swapping practices. The court has yet to certify the case as a class action.
Ali Spagnola, one of the primary plaintiffs, is a Pittsburgh native and Carnegie Mellon University alum. Her company, Businessing, LLC, produces outlandish social media content, such as covering walls with popsockets and gardening a chia pet-covered car. Spagnola, famously spent three years and $30,000 fighting a trademark troll freeing “Power Hour” for drinking games in the early 2010s. Her humor is monetized through brand deals and affiliate commission. But, the PayPal Honey Lawsuit is no joke.
In late December, journalist MegaLag published an exposé detailing deceptive practices behind Honey’s rise. The reporting highlighted an aggressive influencer campaign that made Honey’s ads ubiquitous, promising “free money” and the “best coupon codes.” In reality, the extension often fell short, with users able to find better deals through a simple online search.
PayPal acquired Honey in 2020 for around $4 billion. Around the same time, the Better Business Bureau and other agencies launched inquiries into Honey’s advertising claims. Honey subsequently toned down its promises, replacing “best coupon codes” with “find coupon codes on 30,000+ sites,” leading to the inquiries being dropped. Despite the softened language, Honey’s core business model remained unchanged.
MegaLag’s investigation uncovered claims that PayPal Honey misappropriated affiliate commissions by redirecting tracking attributions. Experts likened the practice to “cookie stuffing,” a fraudulent method of inserting browser cookies to claim sales commissions. Ironically, eBay, which owned PayPal before their split, previously won legal battles against cookie stuffing.
PayPal did not respond to our request for comment.
Legal Eagle is calling on other creators affected by PayPal Honey’s practices to join the lawsuit. Interested parties can apply through a form provided by the plaintiffs.