A prominent YouTuber, Devin Stone, also known as Legal Eagle, has filed a proposed class-action lawsuit against PayPal over its Honey extension's affiliate link practices. The lawsuit, filed in California's Northern District Court, alleges that Honey's extension replaces creators' affiliate links with its own, depriving them of rightful earnings.

The lawsuit, announced by Stone in a video published on Friday, accuses Honey of intentionally replacing creators' affiliate links with its own, even when it doesn't offer shoppers a benefit. This practice, according to the lawsuit, violates California's Unfair Competition Law and constitutes interference between creators and their business partners.

Honey's browser extension operates by offering to find coupon codes for shoppers. However, as described in a video by fellow YouTuber MegaLag last month, when shoppers interact with Honey's pop-up offers at checkout, it replaces existing affiliate cookies with its own in the background, getting credit for the sale, whether it actually found a coupon or not. The lawsuit alleges that PayPal is claiming affiliate commissions through this deceitful practice.

The complaint also lists other ways PayPal is allegedly claiming affiliate commissions, including offering users rewards through its Honey Gold Program and encouraging them to "Get Rewarded with PayPal," which prompts them to check out using PayPal. PayPal's VP of corporate communications, Josh Criscoe, acknowledged that the company follows "industry rules and practices, including last-click attribution," which credits the most recent affiliate with a sale at checkout.

However, the plaintiffs argue that Honey is using this standard practice in a way that's "deceitful and clandestine," luring users into clicking useless pop-ups that insert its code. The lawsuit seeks damages for creators who have been affected by Honey's practices and demands that PayPal permanently cease swapping its own affiliate attribution at checkout.

The lawsuit has sparked concerns among creators who rely on affiliate marketing for their income. If successful, the lawsuit could have significant implications for the affiliate marketing industry, potentially forcing companies to reexamine their practices and ensure fair compensation for creators.

Lawyers involved in the lawsuit have set up a website inviting other creators to join the lawsuit. As the case moves forward, it will be interesting to see how PayPal responds to the allegations and whether the court will certify the lawsuit as a class-action.

This development highlights the ongoing struggle between creators and tech companies over fair compensation and transparency in affiliate marketing practices. As the digital landscape continues to evolve, it's essential for companies to prioritize fairness and transparency in their dealings with creators.