YouTuber LegalEagle sues PayPal over 'sleeping leech' Honey extension | TechCrunch
YouTuber LegalEagle sues PayPal over 'sleeping leech' Honey extension | TechCrunch
A new lawsuit alleges that the PayPal-owned browser extension Honey is cheating creators out of money. Honey, which PayPal acquired for $4 billion in
Reminds me of Opera GX with their sponsors and everyone used their browser.
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.
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.
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 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.
Spineless tech tips
I mean it seems totally on brand for Linus, especially after auctioning off 1 of 1 prototypes he promised to give back months ago. Only to hide behind the fact the auction was for charity.
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.
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.
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. ".
https://linustechtips.com/topic/1415146-weekly-sponsorship-suggestioncomplaint-thread-feb-28-2022/
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/news/linustechtips-addresses-megalags-honey-allegations-defends-transparency 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.
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.
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?
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.
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".
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.
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.
The only thing truly free are those little pencils at IKEA.
There are plenty of free things on the Internet. You're commenting on a free social network.
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
The icing on the cake was lying about the best deals when partnered stores paid them to do so.
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.
Nothing is ever free.
TANSTAAFL comrade!
Tanstaafl
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.
So you don‘t use extensions at all then because you‘re already sniffing the uBlock Origin scandal?
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.
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.
Saved me a watch too, thanks!
You left out the part about Honey charging sellers to hide coupons.
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.
That makes no sense. The problem is not that an extension is tampering with tracker links, it is that it is falsely attributing itself as a sales representative.
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.
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.
I don't see a problem if they let the user know what those extensions are doing, unlike Honey.
Not an issue because FOSS
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".
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.
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.
In this case the class action would be youtubers and other content creators not users of Honey.
Yeah exactly. You can't force arbitration on a YouTuber or other affiliate because a user agreed to your Terms of Service. I know our legal system is fucked, but it's not that fucked.
The class is people that use referral codes as an income source, so not the users that would have been subject to the terms of service.
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 don't actually care since I would remove affiliate tags by hand - some shops put a markup on the items to offset commissions - but the audacity is quite something.
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.
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."
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.
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).
"I would have made this amount of money if you hadn't interfered, maliciously. I lost profit because of you." Nothing to do with morals.
The video has links in the description to the complaint.
[Here it is on Court Listener](https://www.courtlistener.com/docket/69503243/9/wendover-productions-llc-v-paypal-inc/
Edit: To your other point. Why should Honey take money away from actual referrers when they didn’t even provide a discount code?