Honey did nothing wrong
OK, maybe they did something wrong; not actually giving people all potentially available discount codes when you say you will is wrong. But I don't think they did anything wrong by overriding affiliate links, and I think it's dangerous to let people convince you otherwise.
Even if replacing affiniate codes has negative consequences, in the form of lost revenue and uncounted sales, for the affiliates, it is happening entirely in the end user's browser, and in that environment the user has the right to do whatever they want. One can get extensions that strip off all affiliate codes. A user might have a case that their informed consent was not obtained by Honey for one feature or another, but if a user wants to install a browser extension that replaces all the affiliate codes in links they click, they have a right to do that and no affiliate marketer can be rightly empowered to stop them.
If we admit some right to control the user's browser's behavior on the part of affiliate marketers, why would that right stop at interference by Honey? Wouldn't any extension interfering with the sanctity of the affiliate marketing referral data then be a legally actionable offense?
If I, as a user, am clicking on an affiliate link to support my favourite creator, I would not reasonably expect the Honey browser extension to override and effectively steal that commission away from that creator I was trying to support.
The cherry on top is that they do so even if they don't find a discount, they just blanket take credit/revenue regardless of if Honey interacts with your purchase at all.
And if I were a vendor, the point of an affiliate program is to pay affiliates to send traffic that I wouldn't otherwise get. If some third party injects their affiliate ID into traffic that was not referred by that affiliate, such as traffic from someone I had a partnership with or the user just typing a URI in or clicking a Google result, that's actually fraud. They'd be costing me money and providing zero benefit, when I'd already be getting that traffic without it being referred.
Someone actually got a half year in prison for doing that back in 2014, using hidden iframes on pages to set eBay affiliate links so any natural eBay traffic later would give him a commission. It was ruled to be wire fraud.
In the case of the YouTubers who are suing, they were offered money to advertise something that would kill their primary income stream, and not informed of the details. They have standing agreements with those sponsors, which were interfered with by another party, which is standing for legal action in itself.
The links were changed without the browser user's knowledge or consent, so it's taking away the user's agency to control the actions of their computer, making it more like malware.
That, and there is something extra shady about sponsoring creators to advertise Honey then strip out other revenue methods in the process.
You're not a party to any deal or agreement from that perspective though. You installed an extension that attempts to get some promo codes while claiming to get the best ones and was therefore scammed which is something else entirely. This thing is entirely between people competing for commission and the place that pays the commission. Whether this was right or wrong should be up to whomever pays the commission and if that doesn't fit someone then there's a court way to do it which I believe Legal Eagle is attempting.
This is a stronger statement that Honey has done something wrong than what I said.
I'm kind of shocked at this whole Honey debacle.
Perhaps it's because I worked in the advertising industry for a number of years, or maybe I'm just way more cynical than I even realized, but back when I saw all the Honey shilling on YouTube I just assumed that their revenue model involved injecting their own affiliate codes on user purchases and that this must be blatantly obvious to everyone. I mean how else did anyone think Honey was making enough money to show up in so many huge YouTubers' videos? The fact that they injected their codes across the board whether or not they found any coupons is a little slippery, likewise for their back-room deals with merchants for special reduced discounts for Honey users, but I can't understand how anyone is surprised by any of that.
Hijacking affiliate codes is standard playbook material for ad companies, especially on the coupon code side of things. I'd be surprised if there's even one coupon-code-finding service that isn't doing this. All of them (RetailMeNot, SlickDeals, etc.) have been doing the same thing for ages before Honey came onto the scene. I'm also pretty sure that the Brave web browser was doing this across the board for all its users at one point, until they got called out on it and had to stop.
Actually I probably am overly cynical, because it's basically to the point now where if I see a product sponsoring a popular YouTuber's videos I just assume it's either going to be a scam or grossly overpriced (or both).
I'm someone that doesn't know much about the ad space. I thought it was data, not attribution. I thought that their goal was basically to sell the kind of market data that no individual marketplace could by tracking people's purchases across as many marketplaces as possible, which would presumably be of value for ad targeting. This made sense in my head because to make the product work at all the extension would need to send the contents of your cart to their servers for the coupon lookup.
Obviously this was wrong, but I'd assume I wasn't alone in just thinking it was a data play.
I’ll +1 this. I was in the affiliate industry for awhile and understood exactly what Honey was doing.
Users install browser extensions. If they don’t understand what those browser extensions do it it’s kind of on them. Im glad the video “exposing” Honey came out, so users can choose to uninstall it if they like, but im not hopeful this will actually change anyone’s behaviour of installing shady browser extensions.
But it’s 100% standard practice and I don’t believe Honey is “stealing” or anything. It’s their traffic because they got the users to install their shitty extension.
That's definitely a case of familiarity with the industry colouring your view. Your average internet user probably isn't going to know that injecting affiliate codes is even a thing, much less consider it obvious that that's what Honey is doing.
I guess another part of my opinion is that it's not really Honey's job to educate the user on that.
I wouldn't expect the YouTubers who are complaining about stolen affiliate revenue to have to do that either. It should be good enough for them to just say "use the link in the description below to support this channel" without expounding on the technical details of how that works, or explaining that by doing so you would wipe out the affiliate code of any previous YouTuber whose link you may have clicked for that same product in the past. I think if we allow that then it's also fair for Honey to say "by using our service when making a purchase, we extract revenue from that purchase" and leave it up to the user to figure out what that means and whether they're OK with that or not.
A reasonable interpretation of "using our service when making a purchase" would be if Honey actually does something of benefit to the end user, though, such as supplying a coupon.
When the extension advertises itself as an automatic check and just dismissing the prompt that it found nothing is enough to change the affiliate information, that message would need to be that installing the extension at all means they extract revenue from potentially every purchase.
The service of maintaining a comprehensive proprietary database of coupons and allowing the user to perform a lookup against that at all is the service that Honey is providing to the end user, and I'd bet is the thing that they'll use to justify their share of the revenue if any lawsuits make it to court. Even if no coupons are returned, the user is still engaging with Honey--Honey is still expending resources on their end to process the request from the browser and is giving the user access to their coupon data that presumably they're expending more resources to build and maintain. Service is rendered, payment is exacted, coupon or no.
I agree it's kinda shady, but the idea of coupon-finding services in general is shady. A user expecting to install a browser extension and, with no additional effort on their part, start paying less for the same goods and services as someone without that extension installed is shady. It's a garbage industry with garbage products and garbage practices and I think it's on users to understand what they're getting into when they play with the pigs in that mud.
That doesn't change the required message. If it runs automatically then the user isn't choosing when to engage, the only option to not "use the service" is to not install the extension.
It is my very strongly held opinion that this should be an end-user's assumption across the board for all software on all of their devices in general (computers, phones, tablets, wifi toasters, whatever), and doubly so for software that provides some seems-too-good-to-be-true service for "free." One of the first questions when evaluating a product or service should be "how does it make money?" and if the answer is anything other than an obvious "I'm giving them mine," then chances are good that it's still happening at someone's expense, and it's up to you to figure out whose and whether or not you're OK with supporting that business model.
That's still not how most software works, given how things seem to have shifted to EULAs being presented when the software is run rather than during the installation. And given how devices come preinstalled with all kinds of rubbish that it's impossible to remove without advanced technical knowledge (i.e. knowing how to identify a safe alternative OS to install and get it working), I don't think it's a reasonable stance.
I think you're right that with informed consent, users can install tools that do whatever they like to URL's.
But it doesn't seem like Honey had informed consent? So your argument is really that you can imagine a different browser extension that's sort of like Honey and doesn't do anything wrong.
I guess it depends on what you consider "informed consent" to be. Taking a look at a snapshot of Honey's terms of use from back in October it has this language in there:
Sure, the language is a little greasy (what else do you expect from an advertising company?), and I realize that I'm in the vast minority as someone who actually reads terms or EULAs, but it is all spelled out right there.
I'm not really sure what else you could reasonably expect Honey to do outside of dumping something like that in their terms of use, given their business model. They're obviously going to do the absolute minimum to comply with browser extension and advertising guidelines--when it comes to Google that basically means you can do whatever you want as long as you pop your terms/EULA after install so the user can opt-in, and have a link to your privacy policy somewhere. Doing anything beyond that which might scare away users would be actively working against their own interests.
A very strict interpretation of that clause implies that they only receive money off of the exclusive offers. Which would be fair enough: you negotiate an offer, you get a slice of the pie. But that's not what we're talking about, is it? Instead they even take a slice of the pie when they haven't contributed a thing.
My assumption (which might be wrong, I never used Honey or investigated how it worked myself) is that they'd only inject their affiliate code if you actively interacted with Honey on a checkout page and told it to go look for coupons for you. My ad-industry-lawyer brain would say that's justified because by clicking that button you're asking for Honey to use their resources to perform a service (go look for coupons). That service has been performed whether a coupon was found or not, thus Honey expects compensation which it extracts via activating its affiliate code.
If just having Honey installed and never actually using it also resulted in their affiliate codes being injected on all your purchases then I'd agree their terms don't explain that at all (at least as far as I, a non-legalese speaker, understands it), and there's no way in my mind to justify that.
I realize that replying to myself here on what is probably going to be a very unpopular opinion probably won't get many eyeballs, but I want to share a relevant story from when I worked for an advertising company (over a decade ago).
One of the products that I developed was a browser extension for Chrome and Firefox called "Browse for Change." We distributed it as an offer in one of those god-awful desktop installers (another pie that our company had its fingers deep inside) where a user would be trying to install an application like Paint.NET or Pidgin Instant Messenger and would be bombarded by screen after screen saying "hey, you should also install this other shit" and if they weren't paying attention would wind up with ten different shady-ass applications installed alongside whatever they actually wanted.
Browse for Change's EULA essentially touted that just by having it installed and shopping online like normal, at no additional cost to them, a portion of the user's purchase prices from partner merchants would go to charity. You can probably guess how it worked. The beauty of it was that the user not having to interact at all in order for us to inject our affiliate code was baked into the very premise of the extension. Whenever they landed on an online store that we had an affiliate code for, we'd inject the code and pop up a small message at the top of the browser saying "By shopping here you're automatically supporting charity! Thanks!" Another interesting tidbit was than in order to distribute this thing via installers that used Google Adwords, Browse for Change had to be vetted and approved by Google. We had to go back and forth a bit on how best to obfuscate what was happening in our EULA, but the core functionality of the extension as far as Google was concerned was 100% above board.
You might be wondering whether any of the money we made actually did go to charity. I did overhear a brief conversation one time between a couple of my higher-ups where they were making a check out (I'm not sure what charity it was), but from the way they were whispering and snickering about it I'm guessing it wasn't a significant percentage.
One of Google's requirements for distributing software via Adwords was that you needed to publish a real email address to allow for customer feedback. No human received any email sent to any of our published addresses--instead they were automatically routed and dumped into a customer feedback database table. I'm pretty sure nobody else ever actually looked at anything in there, but I spent a lot of afternoons pouring through it and learning all kinds of new and terrific insults and profanities.
That language is also consistent with them getting a cut on the back end based on the code you use, rather than swapping the affiliate code on the front end.
You are right, if the user is aware of this happening and agrees to do so. Which in this case is not what is happening as it happens behind the users back and the revenue just goes elsewhere.
But honey was never marketed as a tool do such a thing, so your argument there simply doesn't fly.
Honey is in the wrong in that they were adversarial to all parties involved, most of which had no idea that their relationship to Honey was being exploited.
You can’t screw over every 3rd party without some repercussions. Now no one will help market for them. Many users will uninstall the extension, and as soon as stores realize their customers aren’t using Honey (and they can tell by seeing how much they’re paying out to Honey) they’ll drop their partner relationship.
It’s to be determined if this plays out catastrophically for Honey. But it’s going to be bad for them.
I will ignore the massive issue with the user not knowing what Honey was doing since other people have already addressed it. If you click an affiliate link of a creator, you obviously deliberately want to help that creator.
Instead, I want to ask specifically why you believe that having the right to do something somehow means it cannot be wrong to do it?
There's plenty of things in society that are not illegal and you have the right to do, yet are still morally wrong. I'm sure you can think of some example. Just because you are allowed to do something doesn't it's not a dick move and that you are absolved from moral responsibility.
Do you believe creators should be paid for their hard work?
I'd challenge that, actually, a lot of youtubers link affiliate codes in their description without addressing it directly. Linus tech tips is probably the biggest channel that's guilty of that. They put amazon links on every of their videos and poach the commissions from anything that you buy for a few days.
I took a look at their most recent videos, and all have an affiliate link disclaimer in the description.
Amazon affiliate links do not "poach the commissions" like Honey is doing, and the commissions on indirect product purchases apply to the sale if made within 24 hours of clicking the link, not a few days.
Please provide any references or resources you have available if this is incorrect.
That is a good point, just because you have a right to do something doesn't make doing it always right.
But I see basically the whole concept of affiliate marketing in that category. Just because it is disclosed that one is being tracked with an affiliate code doesn't really make it right to do that. So I don't see a user as having really any moral responsibility for the proper functioning of that system, and I feel it might be best overall if they stopped it from working as designed.
People should indeed be paid for their work, but people should not be paid to manipulate others or to extract value on the promise of "free". YouTube as it currently exists probably shouldn't.
Could you explain what your moral issue with affliate links is?
A big part of the degeneration of the internet comes from Amazon's affiliate links, every single review blog and lots of review channels on Youtube have links to the product they're reviewing on Amazon, this creates a conflict of interest, they earn money if they buy the product they're reviewing. If there's a better alternative to a product they're promoting but they're not on Amazon there's an incentive to not mention it, because they won't earn a commission on that.
Reviewer kickbacks are a really old practice. Paying off reviewers and influencers is a very effective way to advertise. The affiliate link makes it much more explicit at least.
This is not quite how it works. I looked up the affliates program for Amazon:
This means that creator income is not necessarily tied to directly purchasing the linked product in a review, but to you just clicking the link.
I understand how this creates a conflict of interest, but the actually good part here is that creators can still earn income even if you just click the product to check it out yourself, but end up buying something else instead. This in turn is an incentive to actually be truthful in your review, as what creates consistent income for you is people coming back regularly to your reviews, which they will not do if you lie and they buy a shit product based on your recommendation.
AFAIK, this is how most affliate links work nowadays.
I would contest greatly that a big part of the internet's degeneration come from affliates. Frankly speaking, I'm not entirely certain how you expect individual reviewers to survive otherwise. 99.9% of users are not interested in paying for a service they have been conditioned to receive for "free". Anyone who is growing up with a smartphone (of which we have many now, because anyone born before 2007 is 18 now, and the iPhone came out in 2008), has literally grown up with it. You cannot build a living on a paywall.
This is, by the way, not something unique to the internet either. Back in the daily newspaper days, those majorly funded themselves through ads, not through people paying for the daily issue.
Maybe I misunderstand something about the situation, but I believe almost everyone is missing the big deal here.
Most, including the original video creator, the plaintiffs of the lawsuit, and the comments here are focused on stealing some revenue from the creator by swapping affiliate cookies. I would agree that this is shady, but this is small potatoes when looking at the money, and Honey might be quite lucky if this is the worst outcome from all this drama.
I strongly suspect Honey inserts an affiliate cookie in every purchase, not just those where there’s already an affiliate link. Nearly every online retailer on the planet has an affiliate program, and as demonstrated with NordVPN, companies pay affiliates up to 30% of the revenue of the sale, depending on the contract terms.
Suppose you are a small business owner who decides to innocently set up an affiliate program. Say you pay out 30% of the revenue for affiliate sales. You enter a contract with Honey (20 million users). If those users form 2% of sales, you are now paying out 0.6% of your total revenue to Honey. Not profit, revenue.
Extrapolate to all the business in the English-speaking world, and you can imagine the impacts.
What I suspect has actually happened is Honey has struck deals with any major vendor to take closer to 1-5% for affiliate commissions instead of the usual 15-30%. That still lets Honey take home tens or hundreds of millions per year, but maintains a good relationship with companies who would be investigating and attacking them otherwise.
I think the real losers here are not content creators, but small businesses who enter an affiliate contract with Honey and suddenly find themselves getting strongarmed in negotiations. Maybe companies with tight enough margins have been driven to bankruptcy almost overnight.
I guess this is where the last two parts of this exposé are headed.
The worst part is, since Honey likely has good lawyers, the contracts might mean these small businesses have no grounds on which to sue Honey. I’m not a lawyer, but corporate lawyers have done sleazier shit in the past.
If I’m right about how Honey works, then my napkin estimations say there have been more “damages” than almost any class-action lawsuit in my lifetime. I might not be right, but I guess that will come out in time.
I have a reason to believe Honey is in deep trouble, and not the kind lawyers can get them out of. The money directly linked to the users of the browser extension going to them instead of the content creator who got their affiliate income "stolen" might not make up the most significant part of Honey's income, but the process of making purchases while having the extension installed is still a critical step for their business model to work. If the users disappear, so does Honey's reason to exist. How did they get those users? Through sponsorship deals with content creators, meaning information regarding Honey to their existing users is largely going to be from those content creators, whose audience is primed to side with. Given that both these content creators (who therefore have every motive to use their platform to hurt Honey's PR as much as they can) and their audience (due to the otherwise unrelated issue of the supposedly best deal put forward by the extension not actually being the best one for the user) have been wronged by this, the impact on Honey's userbase is likely going to be catastrophic, and their existing funds will dry up eventually. And no lawyer can save you if you can't afford to pay them. Even if they can escape the legal consequences, the court of public opinion might just have sentenced them to death.
Here's the actual lawsuit, if anyone is interested in understanding the exact legal theory being presented:
https://www.courtlistener.com/docket/69503243/9/wendover-productions-llc-v-paypal-inc/
Thank you for posting this, I hadn't had a chance to read it yet.
From a quick read, they are claiming they have been harmed by having their credit for a sale or conversion being stolen, like if a real life salesperson had their commissions stolen by a third party taking credit. They also claim that their value to sellers as a channel for customer acquisition is obfuscated and depreciated by these actions, creating long-term harm to the value places upon them by sellers.
In my other comment I said sellers might have the easiest path to claim damages for the reasons the influencers argue, but the filing does make a good initial argument that they are harmed by the confounding of customer acquisition metrics. I'll have to read it more closely.
When it comes to larger vendors with affiliate programs, I suspect honey/Paypal have deals with them. They're definitely violating the letter of Amazon's TOS for their affiliate program, which Amazon is otherwise pretty strict about enforcing, so I'm almost certain they've worked out some sort of deal with Amazon specifically. Among sellers, it's very likely that they work out deals with sufficiently large entities and the direct harm only happens to smaller sellers (conveniently, those least likely to have the resources to fight back).
There's no way to know, but I just can't believe that a large platform like Amazon or others would sign an agreement letting agreeing to let honey get credit for a purchase that they actually had nothing to do with. I could see a complicated agreement where honey gets some sliding scale of commission based on how much they helped drive a purchase, but allowing them to possibly pick up a percentage doesn't seem like it's in the best interest of the large sellers. It just seems like to much of a risk to leave an open ended number of your sales getting an affiliate cut taken out for no guaranteed benefit. But I don't have the data to say.
The only way to know would be if a big seller does sue them and documents are released after discovery.
Apparently there was some sort of conflict between them in the past where Amazon had a banner saying that honey was an unsafe extension or something, and they could have definitely banned honey from their affiliate program if they wanted. I suspect Amazon and honey agreed on some lower rate of compensation for affiliate commissions so that it's an attractive proposition for both parties -- honey gets to keep sniping Amazon affiliate links, and Amazon pays out less than they would for the original affiliates. But ofc this is all totally speculation. I really hope this lawsuit proceeds to discovery.
Honey also works as a price tracking tool, it notifies you if Amazon is hosting a fake sale, if the price went up recently or if there's a big retailer that has the item for a lower price. Amazon might not have liked that happening.
oof yeah I can see Amazon not liking that either.
Yeah, it will be interesting to see how it unfolds!
Have a great night!
This post seems to be entirely speculation with very little understanding of the legal background. I won't claim I'm an expert on the law either, but it's a bold move to insist that there's nothing legally actionable going on without having a good understanding of what laws people would be suing them under. It's possible honey didn't do anything illegal, but the fact that a class action lawsuit has already been filed indicates that there's probably at least some legal basis for them having done something wrong to the extent that it's at least potentially civilly actionable. IANAL but the commentary I've seen online from lawyers who aren't involved in the suit don't seem to think it's invalid or frivolous -- if anything, there's been speculation that honey's behavior might have some criminal liability as well -- and they've seemed optimistic about the suit's chances especially when it comes to the claims under California state law for things like unjust enrichment.
Honey's scam is getting a disproportionate amount of attention because they had the poor judgement to screw over a large number of big YouTubers, and I can see why that annoys some people, but it's important not to overcorrect to the point that you're endorsing brazenly unethical business practices by a huge corporation like PayPal.
I think the motivated nature of your reasoning shows in your conclusion:
This is not a sensible conclusion. The case is alleging that the browser extension is doing unlawful harm. Suing the creators is not "controlling the user's browser" any more than shutting down a botnet would be. The user's ability to redirect links if they choose is unaffected.
If what Honey does inside of a user's browser is exclusively between the user and Honey, how could it cause unlawful harm to a third party like the original affiliate marketer? Why wouldn't all the harm caused to them be lawful?
Imagine I own a bakery, and I want to increase the number of customers. I start a referral program where every regular that brings in a friend gets a free donut. Some scammer figures out that instead of bringing their friends, they can just stand outside the front door and walk-in with anyone that was already going to shop at my bakery to get a lot of free donuts.
That scammer is hurting my business because they're ruining the whole point of a referral program! They aren't increasing traffic to my store; they're just lying and saying every customer was referred by them.
In the case of Honey, they're also scamming all the good-faith referers by stealing their free donuts. They lie and say "actually that new customer was from me, don't bother partnering with anyone else!" If someone tried to join the referral program, they wouldn't earn any free donuts because their referral metrics are falsely warped by Honey lying about the source of the referral.
I think you're getting lost in the weeds here. If instead of hijackng referral links without the user's knowledge, it did some other form of harm without their knowledge, for example, posting defamatory opinions about you, @PendingKetchup, on social media. All 17 million browsers with the Honey extension posting leading questions about @PendingKetchup. Would you be able to sue Honey for defamation for deliberately orchestrating a mass campaign to smear you, or would that be "exclusively between the user and Honey" and therefore all harm caused to you would be lawful? Would your suing them be "dangerous" to users' freedom to post their opinions?
Because it's harm and it's not allowed by law. Why would that be different if you use a network of browsers to do it? By your logic, it would be perfectly legal to create botnets of infected PCs participating in DDOS attacks. After all, each individual machine in the botnet is just loading a web page repeatedly, which a user can choose to do if they like.
In the lawsuit filed by Wendover and Legal Eagle, they claim Honey's actions were unlawful:
I'm definitely not a lawyer, but Devon Stone (Legal Eagle) is, and it'd be reputation-destroyingly bad for him to allege illegal action on Honey's behalf if that was transparently not the case. Maybe the attribute stealing is gray-area, or maybe it's well established law, but for these guys to very publicly allege that Honey broke the law leads me to believe that there is some precident here. I'll keep reading the suit and update if I find something concrete.
I admit no right.
I use an extension* specifically to strip affiliate trackers (and other tracking information) from links I click. Anyone can do this manually if they wish, it's not hard. 90% of the time (or more) everything past the first
?in a URL these days is junk you can drop without any loss of functionality. Affiliate marketers aren't controlling anyone's browser behavior by constructing links as they do, the option exists at any time for any user to modify that link as they wish before proceeding. The user has control at every juncture here, regardless of whether the majority will lazily opt into whatever tracking is presented to them (and crucially, the affiliates are making users aware of this behavior.)Honey is, without user knowledge, setting a tracking cookie and overriding the specific behavior that the user has opted for by any of 1) implicit acceptance from clicking the link unmodified, 2) utilizing a browser/extension that strips such information, or 3) cleaning links themselves. You can call that doing nothing wrong, but you are wrong to do so. Google has kicked other extensions from their marketplace in the past for modifying affiliate trackers without user knowledge, so there's a clear history of this not being okay, it's honestly shocking that Honey hasn't been immediately pulled for doing likewise.
*I do not use and have never used the Honey extension in the interest of transparency. I always suspected that they were up to shenanigans, as I do for anyone who claims to be providing a no-strings attached free lunch.
The user was never informed this was happening. They probably clicked affiliate links from content creators, thinking they were helping them out by using said link, only for Honey to covertly undo that. They also did not tell the influencers they paid to promote their product that it would do this and ultimately hurt their revenue long-term.
Dishonesty is fundamentally wrong. Hiding the truth in the middle of 30 paragraphs of legalese and calling it a "User Agreement" or "Licensing Terms" does not count as informing the user. Every executive at Honey involved in making these decisions should never be employed again. Make them live off food stamps and charity.
I would think it might help to break up the different kinds of "wrong." I would agree that it is hard to say they harmed users, at least in a legal sense. I'm not sure what damages could be claimed by a user of honey. Even assuming a honey user intentionally purchased through affiliate links to support an influencer, I'm not sure they could enumerate damages. To your point, I don't see how the influencers can claim any legal right to the behavior of the clients system, and I don't know how they would have standing to contest the behavior of client systems not their own. That said, a suit has been filled so maybe there is a good theory of liability, and it's more than just a settlement expedition.
Morally, I think honey did do something wrong. It sounds like they didn't make clear to the users the ramifications of the use of their tool. It is one thing to automatically populate coupon codes, and another to change or insert affiliate tracking links to claim credit for something they didn't earn, e.g. they didn't create the referral that led to a conversion. I'm of the opinion that each type of action performed should be prominently disclosed to users and consented, but that is a subjective take.
If anything, it seems that sellers who issue affiliate codes might have the most legal standing as honey obfuscated who created the referral, muddying their customer acquisition strategy, and possibly getting credit for referrals when no referral occurred. I.e., not replacing an affiliate code but inserting one. The seller is losing revenue by giving discounts for referrals not earned by Honey/PayPal. But it would be difficult to prove and litigation is expensive. But maybe PayPal has deep enough pockets to be attractive.
Edit: I'll amend the above after reading the filing posted by @unkz. R influencers do a good job of arguing along similar lines to what a seller might argue. By having credit for the conversations stolen, the influencers are viewed as less valuable of a acquisition channel, creating long term harm. I still think they will have an uphill fight if honey counters that users control if and what affiliate link is used, and that by using honey they decided to let honey control that. Still though, it will be interesting to watch.
I am kind of assuming that Honey was not breaking the rules of any merchant's affiliate programs. If they were inserting their own codes while telling a merchant they weren't doing that, that's wrong.
I won't dispute that Honey has harmed the affiliate marketers whose credit for sales they took away. I'm just disputing that they did it in a way that isn't (or oughtn't be) allowed.
So, a few things here.
Virtually noone wants this.
The scandal here is largely about being scummy behavior, not necessarily legally actionable behavior.
While there are now lawyers involved, it isn't because the action of replacing affiliate links is inherently illegal, it is because they lied about what they were doing (e.g. telling consumers they were getting the best deal available while simultaneously telling their partners very specifically their consumers wouldn't be getting the best deals available).The lawsuit is actually about the behavior of replacing the affiliate links, which does actually seem inherently illegal
Again, it's not inherently wrong - it's a scandal because noone knew that's what they were doing, along with their entire business model being incredibly scummy.
The current lawsuit actually is about the action of replacing affiliate links, not the misrepresentation of their coupon deals. It's a class action suit on behalf of the people who would be getting those affiliate commissions, alleging causes of actions specifically relating to that behavior. The fact that users were unaware that they were replacing affiliate links is potentially relevant, but their lies about having the best coupon codes aren't even mentioned in the original or amended complaint.
I stand corrected then
I agree with what you're saying in general when it comes to the user having control over their environment, but I also agree with the comments that this was done without users knowing. Honey was marketed as a tool to help you find discount codes. It was not marketed to steal revenue from other affiliates. They did not make it clear to users that this was happening.
While user browser autonomy is certainly a thing i support, there’s also the legal contract honey entered with its customers and users.
It is in regards to that in which they are being sued and are likely 100% guilty of at least something akin to fraud
It's actually not. The class suing is content creators who had their affiliate links replaced by Honey. They aren't party to any contract with Honey.
Well, at least one them actually is. Two of the primary plaintiffs are YouTubers, and I know that Sam Denby's Wendover Productions has been promoting Honey on their channels for years as part of an ongoing sponsorship deal with them. But the class action isn't specifically about that sponsored content contract, so is open to all content creators making use of affiliate programs, since even ones without a sponsorship deal directly with Honey have been affected.
I mean that relationship is incidental to the lawsuit and not a property of the class. The class itself is not concerned with any contracts.
I could be wrong on the details but i'm pretty sure this is not correct. The entire issue is that if you are an affiliate you pay/work with honey to give them your links. Honey then, was supposed to, circulate your links to various users who otherwise wouldn't have known about them, getting them a discount and you a referral. You pay honey for this.
https://www.courtlistener.com/docket/69503243/9/wendover-productions-llc-v-paypal-inc/
These are the (current) plaintiffs:
They are all Youtubers. Their complaint is that when they place affiliate links on their channel, Honey steals their attribution. Here's the meat of the complaint (page 9, under "How Honey Misappropriates Affiliate Marketing Benefits"):
The proposed class is defined as
This class contains people that have not had any direct interaction with Honey at all. In a practical example, if I joined Amazon's affiliate program and then started a blog where I posted my own affiliate links directly from Amazon I would likely be part of the class. The "likely" comes from it may be hard to say with certainty if any of my potential affiliate sales were in fact actually redirected via Honey.
This is where discovery will be interesting -- the plaintiffs allege that Paypal/honey is keeping track of the affiliate links they poach, which could mean that they themselves have the information that can prove your damages.
There is another browser extension called "coupert" which more transparently does this: it provides users small amounts of cashback in exchange for being that final-click. They are not great in other ways and still do not make it as prominently obvious as I would like, so I will not link you to their service, but it's not as hidden as honey.
For example, here's a line from their documentation about their cashback feature
How do tilderinos feel about this service? Is it just being tricked that upsets you, or is it the practice of replacing referral codes with a service's own?
I think transparency to the end-user is definitely part of the issue and it makes this service less scummy about what they're doing than honey. It's still not great for people who rely on affiliate marketing, but they also aren't making sponsorship deals with huge swaths of those same people without informing them that this is their business model. Still kinda sus and not a great model imo, but definitely less dishonest than honey from what you say here.
What irks me is that these big channels couldn't even do their due diligence to check if a product they were promoting wasn't scamming THEM, and when they realized how it actually worked they chose to make this huge show of force that they have never done for literally every other scam they have promoted. It feels really icky to me.
While I agree that the wiser and more ethical move is to not take sponsorships from companies when you don't know how they make their money (and the fact that some creators like Markiplier avoided honey for this reason is evidence that it wasn't exactly impossible to come to this conclusion), I don't think it's necessarily fair to expect every content creator to vet whether a big company like honey/Paypal is straight-up deceiving them. I think that shifts more blame to content creators advertising honey than is really fair given honey's actions here.
As for the "huge show of force," I can only assume by that you mean the lawsuit, and lawsuits rely on the plaintiffs alleging damages -- which means the scam has to have harmed them in order for them to have grounds to sue. If a content creator advertises a scam like BetterHelp that only harms viewers, they wouldn't have grounds to sue. The fact that this scam affected them is a prerequisite for a lawsuit with any hope of not being thrown out.
The huge show of force is all the youtubers making videos about the topic and telling viewers about it. The creator of the video was bragging that honey lost 3 million users over this, for example.
I don’t know if that can be ascribed to a coordinated move, the way “show of force” implies.
I think each individual creator who ever earns anything via affiliate links has a financial incentive to reduce the number of Honey users who would click their affiliate links. Likewise any content creators who value honesty and transparency have an incentive to broadcast their newfound knowledge to their user base so that users at the very least can make an informed decision about whether they want to install or uninstall Honey.
I think if Honey was up front about how their system worked, there might still be a lawsuit but almost none of the current “show of force”
The behavior (barring when they don't find a coupon I guess, and that's debatable based on their wording) is pretty well explained in their website though: https://help.joinhoney.com/article/30-how-does-honey-make-money
This isn't a hidden link on their website either, you just go to their homepage > FAQ > how does honey make money?
I'm not sure how much more transparent honey could be other than just straight up stating that they take money directly from creators in their pitch. Honey is also hardly the first website to use that system too, there's tons of websites that are 20+ years old that gave cashbacks if you gave them the referral link, and nowadays there's a lot of companies that basically turned into a honey clone (rakuten, swag bucks).
Based on the evidence shown in the original expose, Honey does not exclusively snipe affiliate links in these circumstances, but uses a variety of shady tactics that approach cookie stuffing to acquire affiliate commissions even when they have not found available savings or provided any value to the customer whatsoever. You can't just slip in "barring when they don't find a coupon code" like that -- the fact that this behavior happens even when Honey does not find any discounts is a huge piece of evidence that they are not participating in the affiliate commissions process in good faith.
I assumed when writing my previous comment that you could not mean things like the original video because MegaLag has exposed multiple other scams and he's gone in similar depth in his previous exposés. This one definitely "blew up" more than his previous exposés, but that's largely because of how pervasive Honey and its advertising have been in those same YouTube spaces -- more people who watch YouTube videos with any regularity are going to recognize Honey as a brand name and have experience with it than, for instance, EnChroma (the subject of his most recent scam exposé, which itself was a big enough deal that the CEO was pressured to respond).
Honey is the general public enemy of internet folk right now, they're going to get a disproportionate amount of flak. I believe Honey deserves some backlash, and I don't object to them getting more than what would be a "fair" amount.
Others have already mentioned it, but I'll reemphasize Honey did do something wrong. Their affiliate cookie swapping is invisible to the average user. It's reasonable to think Honey overstepped by overwriting other affiliate cookies when they've provided no coupon, no service, no value on their side of the transaction between Honey and user. That's not the worst thing in the world. They're scraping up a few bucks here and there. But they've made a lot of money through these shady actions.
I don't think it's that serious. I'm not sure what the danger could be. I think Honey will be fine.
I agree with you, but speculating on where OP might be coming from:
There has been a long back and forth between sites and visitors on what is "right" for a visitor to do with the content served up, and more broadly, who has the "right" to the bits in the hardware you own. Is it wrong to modify the HTML and JavaScript that sites pass to the browser? E.g., blocking ads, asking client side functionality via extensions to browser based games, etc. There are some who are very sensitive to any perceived argument that the computer owner doesn't retain full rights to every bit that transits their system, such as the right to circumvent DRM.
I'm just speculating that OP might be alarmed at the potential for folks to conclude that a visitor of a site doesn't retain the right to control the behavior of the client, and is maybe reacting with too broad a stroke. (I'm not expressing an opinion, please don't debate me bro. 😂)
Yeah it looks like I missed the point. I got caught up in the morality of Honey's actions and skipped the part that matters most to OP. Whoops. Thanks for pointing it out. I'll leave my original comment as is, I still don't think it's that serious.
Just because it can be done, doesn’t mean it should be done. I’ve seen other products exploit such low-effort opportunities to make money and, while there’s nothing illegal about it, I think we should keep shaming people for doing it.
intent
control.
the important part of such a product is intent. How does Honey sell its intent? "we will get you coupons to save you money!". Okay, fair enough. I still think it's a bit underhanded to not disclose that there's affiliate codes injected (might have been against the FTC or FCC rules, but Chevron's gone so who knows?), but overall it was doing its job.
However, "side effects" (aka, unadvertised or even hidden behavior) are where things get tricky, and they aren't just bugs or unintended behavior, but the real point of the product. e.g. Facebook is a free place to connect with your friends but side effect: we sell your data to 3rd parties without your consent and you will get hit with more ads. Sure, if that was clearly said upfront when you were signing up and you agreed (not in some lawyer fine print), then there's arguably no issue. But...
Ignoring the morals and legalities of Honey, it simply fails these 2 sniff tests for me. redirecting links isn't a bad thing by itself (I have old reddit redirect who's intent is in its title, and AFAIK no side effects). But keep in mind that this is also a common anti-pattern for viruses, so it's a technique to use carefully.
I’m surprised (and also not) at the reaction from Tildesians on this one. Most are quick to point out that Honey did something wrong but I see zero admission of fault for users.
In my eyes, if you are a user who:
You are just as culpable as Honey for “stealing” this affiliate revenue (and I personally don’t see it as stealing).
The ad industry is adversarial; it always has been. It’s cut throat because users are fickle and have always chosen convenience over quality, privacy, and fairness.
The only way we get out of this is by changing the culture of users. It’s easier to blame Honey but more productive to look at ourselves. This is an opportunity to do that, but it won’t happen unless users take some of the blame, here.
I agree with your takeaway but take a hefty dose of umbrage at the steps you took to get there. Yes, people should not be signing away their lives to shady companies. But I think it’s unreasonable to expect the average people to know the entire business model of every company they interact with. Most internet-only or just about any large company has multiple income streams and intentionally tries to obfuscate them from consumers. If you buy a car, you probably aren’t aware that they are all taking and selling your driving habits to third world parties, even though nearly all of them do. And in fact there are many cases where one is heavily incentivized to take those deals, or otherwise completely unable to function in society without accepting those terms.
We do need collective actions against these practices but if we blame people for them then they will instead say that the companies are great for having taken the initiative and people who are trying to stop it are evil. Heck, just look at politics today.
I agree it’s not easy to understand all of these complicated business models. And I also think it’s possible to try to use your dollars in a way that matches your values. It doesn’t have to be for every product or service you consume, even taking a couple of minutes to do a google search on a browser extension is more than what 90% of people do.
If everyone demands everything should be free, then stuff like Honey is inevitable. I’m not saying that consumers are the only ones to blame, but c’mon - trusting ANY browser extension which is owned by PayPal is pure folly. Consumers have to take some responsibility, or none of this changes.
How much awareness of the technical details of affiliate cookie / url replacement would you expect the average user to have?
We can (and do!) make any number of excuses for users, but this predatory behaviour won’t change until users are willing to change.
So yeah we can say “average users don’t understand that you don’t get something (coupon codes) for nothing” or “average users don’t understand that when you install something on your computer it can do malicious things”, but IMHO that’s not very productive.
I’d rather take responsibility than give it away to private companies who will exploit it 100% of the time.
I believe it would be less productive to assign blame to users for being insufficiently vigilant than to the company that exploited it. Generalizing the situation, assigning blame to the company emphasizes that measures should be taken to prevent it from continuing its harmful behavior, which is sensible. Assigning blame to the users, meanwhile, emphasizes... not trusting any offer without auditing the company's business model and making sure it's sound? It would be wiser in theory, but is unsustainable when applied to daily life given the sheer breadth of services and companies you have to interact with just by existing in modern civilization, and no one can possibly have the time to do the amount of research that would require. Honey presented itself as legitimate and exploited the trust of everyone else involved to their detriment, any blame for the harm it caused should fall squarely on them.
PayPal has a long history of exploiting users and merchants. They are a bad company. It takes a 2 minute google search to find that PayPal owns Honey. If PayPal shows up at your door with “free money” you should definitely be suspicious.
I’m not saying consumers should take ALL the blame, I’m saying that nothing about our predatory system changes unless consumers change. There are bad companies out there - unless consumers refuse to do business with them, they will outcompete the ethical companies.
If we always blame companies/government for our situation, we are giving away our power. If we accept responsibility, it means we can do something to change the system. I’d rather have some power than be powerless.
The youtubers are only mad because they got screwed, if it was their audience getting screwed they wouldn't care.
If it was their audience getting screwed they wouldn't have standing to sue
I don't see legal eagle setting up a class action to sue Yotta bank for falsely claiming they were insured.
You'll note there's another law group at the top of the complaint. He's not the lead attorney on this case. I'm not sure he normally does class actions. He has standing to sue, he's participating in a class action and it looks like he's serving as one of the attorneys on the case, but i'm not sure how that all plays out or if the other law group will take point. And is the Yotta bank case even something they can successfully sue for? How strong is the case given financial regulations? Does he have any of that experience?
Someone can have a poor opinion of Youtubers but it's silly IMO to expect them to lead the charge for any business fraud that's ever been done by anyone that's advertised on a channel. Maybe they don't care, IDK, but you can't (with any expectation of an outcome) sue for anything and everything.