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@@RenNotRen correct. It's also important to note that there IS NO CONTRACT between the influencers & Honey. Any ToS here would be between the browser extension user & Honey - but it's the INFLUENCERS who are (allegedly) being defrauded, and there is no apparent commercial relationship between them. I'm an ethical hacker who graduated law 3 decades ago, and I think some reverse engineering of this extension will help demonstrate that Honey's behaviour in replacing cookies is indiscriminate.
You seem to have misunderstood a key point in this video. The contract with the influencer doesn't matter because they are punching commissions even from those who aren't partner. If you yourself have a commission link in you video and I click it so you can get a kick back, but I have honey installed, you will lose that commission and they will get it. You haven't signed anything with Honey, but they are taking the commission anyway.
@@davidlisteresq It's even more sinister than that, which is what the class action hints at: brands track affiliate performance based on affiliate links. If you don't bring them any sales or very little sales, they won't partner with you in the future. Honey destroys sponsorships for influencers. Literally, actively.
@@Dayanto There are lots of people who do not use honey at all and have affiliate links to things. People like Twitch Streamers, Facebook and Instagram influencers and just regular people who do not have very many sponsors or do ad reads for their small channels. Those are the people being hit the most by the Honey swap.
So the second example he shared should help with this case, he hasn't had a contract with Honey before he just made affiliate link and Honey took it when he used it.
Exactly. If there was even a contract or agreement, then it was with the user installing the Honey plugin. But the user was led to install the plugin under false pretences as they were told they would be getting the best deal (which they don't). However when Honey replaces an affiliate link of mine, then there is no contract between me and Honey, so they actually steal my commision while I may have led the buyer to the checkout page. There is no contract between Honey and the people they rip the commision from and it is also at least unethical how Honey shows a popup to tell you there are no coupons and by clicking the pop-up away you 'give' the last click to Honey so they can get the referral link. I am not a lawyer, but to me this sounds like misleading people to make the click without clearly stating that clicking it will hand all affiliate money to Honey.
You missed the point. This isn't just something that affects Honey's influencers, but everyone who uses affiliated links. This browser extension steals everyone's commission. So regardless of where it's mentioned in the terms of service, those people never made an agreement with them.
@@qbi4614 No, you just don't get how tort law works. She is right the first thing to do in this case is to check the user's TOS to see if they Honey covered their asses.
To her credit, the original video was a bit confusing, because he used the same content creator in the example. He should also have made it clear, that this will happen to anyone with an affiliate link. I don't know this female lawyer, but I'm sure, if she had a bit of time to think about the video, she would have figured out that part. We aren't all tech savys, who understand the technicalities of a browser extension.
"even if I don’t have a deal with Honey" Well, that doesn't mean that the customer who installed Honey extension in their browser did not agree on the ToS of the extension. So they could have been formulated a sentence in their Terms of Service document that a user of their browser extension gives them the affiliate earnings because of their service participating as a last step in the chain of purchase. But seemingly they did not do that.
Thing is: The contract being breached is probably the one PayPal has with the company paying them the commission (e.g. Newegg, Amazon, …). It probably states under which conditions a commission can be payed out. And these conditions usually do not cover faking a user click by opening a tab in the background. They hopefully say that a user must knowingly click an affilliate link. Usually the TH-camrs even need to mention in their video descriptions that their links are affilliate links for that reason.
@@temp50 Well, just because Person A agree that Person B can take Person C money dont mean that Person B was that right since it still person B money. And there is a precedent that what they did here is wire fraud so if it is a crime then the TOS is void anyway
@@temp50 so if I make a contract with my neighbor that states that it's ok to steal money from you and my neighbor and I both agree, then it's perfectly OK for me to steal your money?
@@temp50 That is not even remotely how things work... Like goodness. A contract like that can not apply to a person who has never seen or engaged with the product. In this case we're talking about a viewer using Honey on a page they went to by an affiliate link from some creator who doesn't have Honey and has never done business with them. Honey can not legally bind this creator to a contract saying they're allowed to steal their money, just because a viewer the creator was unaware of used a product on say Amazon or something. Caffin8tor's example is pretty good for explaining why your statement simply makes no sense.
@@mymusicpublisher It means that everyone is affected, not just the people who were sponsored by honey. The people sponsored by honey are the ones who promoted the browser extension, which in return, got them to 20 million users. So a lot of people had honey installed so if a user clicks on any affiliate links by any content creator (even ones who have nothing to do with honey), and that same user clicks the honey extension when checking out. Honey takes the commission.
@@mymusicpublisher it means that having honey on your browser will swap any affiliate code with their own when checking out. So Honey is doing this to creators who do not even promote the service.
There are thousands of influencers who aren't in a sponsorship contract who have also gotten their money and sales stolen. those who haven't signed anything with honey/paypal will still get robbed by them
Yep. It goes so far beyond influencers. Anyone who genuinely promotes online sellers can have their commission stolen by Honey. The example of the real-life TV salesman explains it perfectly - he has no agreement in place with the Honey guy.
22:30 - The part you are missing, is that Honey didn't only poach the affiliate income of the influencers, that promote Honey (and hence have a contract with Honey), but poaches ALL affiliate income. Also the income of those influencers, that do not promote Honey and have no contract with Honey. So there are damages to third parties here.
Andrew Miller overwrote Amazon's cookies. He got $2M and a jail sentence. The overwriting was considered fraud. The Honey's "We found nothing" mechanics look similar.
The way they're getting around that so far from a legal perspective is that they don't actually modify the cookie themselves, they open a new tab, with their affiliate id in the URL, and because of "last click attribution" the site itself (for example Amazon) then sets the cookie, and then the tab closes. In the end it still amounts to the same thing, but they're not directly editing the cookie and so they will attempt to use that as a defense, and thus the argument likely won't benefit from established precedent.
@@DreadKyller they are just getting last click. The reason the original poster said he couldn’t figure out why sometimes the link didn’t get switched and sometimes honey found a great discount. If that site goes by first click then honey can’t steal it, as they are last click
Only at 8:23 currently and this may be addressed a bit later, but this isn't happening to just the affiliates promoting Honey. This happens with anyone's affiliate link even with people who do not promote honey. Having the Honey extension indiscriminately does this to all affiliate links for any product from what I understand.
It's also annoying how everyone keeps saying TH-cam influencers get their commissions stolen without mentioning anyone else. It's like they think that TH-camrs are the only ones on the planet who provide affiliate links.
@@gigglybeastThey do mention bloggers, but it's only briefly and for the example of who gets the commission. Mention was if you quit an affiliate link on a blog, but didn't buy, and then you click the affiliate link of the TH-camr sometime later the TH-camr would get the commission.
@@gigglybeast It is because TH-cam is the biggest recognizable platform for that particular situation, plus it is the platform he covered. How it is worded is not the issue. The issue at hand is fraud and dishonest practices he sees.
@@alphadragongamingFTW I would argue that Instagram is actually a bigger platform for this. Yes we are on TH-cam so everyone here uses TH-cam and not everyone uses Instagram. However, my experience from the other side, I work for a law firm (not as a lawyer) that does investment administration - making sure that the investors money gets spent on the things it is supposed to be spent on, I've never seen the advertising budget on any of the investments I've managed go to TH-cam influencers, but it very often goes to Instagram influencers.
One thing I didn't think about until the Wendover Productions class action that was filed... Honey is completely screwing up marketing campaigns... Let's say you are a company with no Honey affiliation and you run a giant marketing campaign to increase sales with Vendor A to get a lower price for your subscribers... When Honey comes in and steals the sale - your marketing campaign is not leading to sales (since Honey "made the sale") - and thus the company is not able to negotiate better volume discounts. They are screwing up marketing conversion numbers - and the company's leverage to negotiate with the vendor. I totally missed that aspect.
@@ChurchOfTheHolyMho This is true to an extent however there's a pretty good chance that many companies also collect metrics on when affiliate codes are used based on that initial affiliate link click. Which makes the lawsuit pretty interesting because in theory there could be a lot more buried data on how many affiliate links were used that were eventually poached by honey as well as wether or not the honey 'sales' actually resulted in any discounts. Now, that info would be spread across thousands of stores with varying metrics and retention, so it's not necessarily going to be easy to compile, but the data is, in theory, out there. So discovery will be interesting.
The contract between youtubers and Honey are irrelevant. Once the browser extension is installed, it'll steal from anyone regardless if they have ever worked with Honey. For example, let's say that you have a TH-cam channel, and you have never ever worked with Honey. You use affiliate links to make some extra money. I installed the Honey extension because some other youtuber told me to. Honey is taking your money too, and anyone who's links i click on. If you have affiliate links, they've been stealing from you for a while and you probably never heard of them before.
They also poach commissions from businesses/people that aren't "influencers" and have nothing to do with TH-cam. Lot's of business websites provide affiliate links.
Also also, they're getting money from random people who just have the app installed, inserting an affiliate link cookie even if you, like, just hit the site up because you've used it before and had a need or desire to search up and buy a product.
Even if you're not promoting HONEY, this can still cause them to take your sale. All the person has to have is the browser extension and it's gonna do the same thing anyway. Those people don't have contacts.... they're being scammed
Stopped using Honey years ago due to them never finding any coupon codes. It was obviously something shady going on but never knew of the affiliate stuff.
They're stealing from random people too, not only from youtubers/influencers who signed a contract with Honey. They just need you to have the extension installed on your pc and every time you click on the pop-up they can redirect the money towards their own pockets. Stealing the money even when they're not providing any code and you're just clicking on the "Got It" banner to get rid of the pop-up is just revolting.
8:00 Consider that this doesn't happen just to influencers who work with honey, but every singe time a customer with honey installed purchases something with any influencer's referral link, not only those who have contracts with honey.
@@gigglybeast nope, it's enough you installed honey, go to checkout and click on any Honey button: they take the commission even without any referral link.
I'm no attorney (I only speak pig-latin), but it seems to me that what PayPal/Honey is doing is claiming an automatic referral commission irrespective of how the buyer gets there. If you have the Honey extension installed, here's what happens, apparently: If you clicked a TH-camr's referral link who promoted Honey, it snatches the commission. If you use a referral link from a TH-camr who has NEVER promoted Honey, it still snatches the commission. If you buy something on NewEgg and got there completely organically, *Honey snatches a commission* . When you realize that the sole purpose of the Honey extension is commission-siphoning, wouldn't you have to classify Honey as... malware?
I want a version of Honey that gives ME the referral fee every time I shop anywhere that offers it. Watching this argument between groups who pretend they're not commision salesmen, while arguing about who deserves the commission, only has informed me that I too could be getting that condition. It's my money I'm spending... why do THOSE shmucks think they deserve a vig, ha? I think it's time this block gets a new boss, ahhh? Waddaya mean, "Logan Paul's a made man"? That's not even an Italian name! Hey, where are you takin' me? I'm not supposed to go to the Meadowlands!
@@GizzyDillespeeJust sign up for the affiliate program for whatever sites you do your shopping on so you get paid a commission for everything you buy, and then write those purchases as a business expense for a tax return.
@@GizzyDillespee It get's worse. If you watched MagLegs video, Honey does offer a program where you can earn "rewards" for buying. He showed the example where Honey got a $35 dollar commision, and shared 89 cents with the buyer.
It would be adware cause they do it via popups. What Honey is doing is cookie stuffing, which is a type of affiliate marketing fraud. I've made several reply comments on it here in others comments. But, to sum it up... Cookie stuffing is basically tricking a merchant into giving you a commission by making them think you are the one sending them the users via forcing clicks or altering cookies on a user's device. Honey does this with their popups hence adware. When you click the popup the existing affiliate cookie is altered or they add their own onto the users device. They do this by opening a separate URL that tricks the merchant into thinking that Honey was the one who sent the user to the store page. In reality, however, the user was already on the store page purchasing products while checking out. The US governement, as well as the FTC, deem it to be wire fraud based on past cases involving cookie stuffing
7:45 You're misunderstanding, it's any affiliate link, it has to do with the customer clicking the Honey button, not to do with the influencers that promoted honey. You're misunderstanding is that there is no contractual agreement between influencers that DO NOT support honey, but Honey still does this to them too. So your defence fails. I wouldn't want you as a lawyer.
She's a music lawyer, she's convinced that contract law is God and you can sign away your soul. The idea of second-order damages literally does not occur to her.
I feel like the "I wouldn't want you as my lawyer" comment is a bit harsh. Megalag doesn't make that point very clear. I hope he does into his next installment. I didn't realize it upon my first watch. But yeah, your point stands that it doesn't matter what's in the contract for the users and influencers since Honey is doing this to influencers and content creators who haven't used or support Honey. Despite the "contracts" it's still scummy. And stealing. It should be illegal and any contract that binds someone into such an "agreement" (very heavy quotes there) should be illegal.
It doesn't matter if the influencer stops doing business with Honey, because it's up to the end user that has that extension installed on their computer. As long as the end user has Honey installed, the influencer will loose that commission.
There's an angle to this that keeps being overlooked by the commentary channels covering this scandal: As a marketer who's also done some affiliate marketing and still does on a small scale, each affiliate program provider has their OWN terms of service that's legally binding between them and their affiliates, and that ToS MAY cover what PayPal Honey is doing as a violation of the STORE's Affiliate Program ToS, and PayPal Honey can't override that contract with their own contracts between Honey Users and Honey Promoters, as the business who provides the affiliate programs IS NOT A PARTY TO THAT CONTRACT. Also, What about affiliate marketers who NEVER AGREED to any terms with PayPal Honey? They're also NOT A PARTY TO THOSE CONTRACTS, yet they are being adversely affected by them.
Honey is engaging in cookie stuffing, which is a type of affiliate marketing fraud. And, since you engage in affiliate marketing I shouldn't need to explain what any of that is or means. They alter the existing cookie or insert their own onto a user's device by opening a separate URL. This tricks the merchant into believing Honey is the one promoting and sending them customers to the store page. In reality however the user was already on the store page purchasing products. This type of affiliate marketing fraud is considered wire fraud by the US government and FTC
It seems like she really misses a lot of the stuff that honey is doing especially to people who don't have contracts with honey. And those influencers who never use hanging themselves and never agreed anything with honey. There's Millions of influencers, they could and probably have lost revenue due the honey. Does that mean honey has to give back? At least 35 bucks per influencer. Or maybe every time that they'd made money off in a billion we can't wait. They have to pay that back out. Based on how big the channel is meaning. I need to make any money. I don't know, but they literally stole thousands of millions from influencers who do not have any affiliation with honey. And websites that are not affiliated either. It would be a breach contract between that influencer and that website this not associated.
Its actually bigger than just a class action lawsuit....this is federal levels of charges. Honey is engaging in cookie stuffing, which is a type of affiliate marketing fraud, by opening a separate URL that is altering or inserting their own affiliate cookie onto a user's device when the user clicks the popup. That popup would be considered adware and tricks a merchant into thinking Honey sent them the user to their store page. But, actually the user was already on the store page purchasing products. The FTC and US government consider cookie stuffing to be wire fraud and havw already ruled on past cases involving cookie stuffing. And who handles wire fraud?....The FBI, DEA, Homeland Security, and IRS.
I appreciate the thoughts about contract law and terms of service but coming from the perspective of a certified full-stack web developer this isn't how the internet operates. Opening a new link to get an affiliate code is an alternative action and erases the previous claim. This is fraud without the laws to support it being classified as that.
Honey alters the existing affiliate cookie or insert their own using a popup, which would be considered adware. When the user clicks said popup a separate URL opens unknowingly on the user's device causing the above stuff to happen. This tricks the merchant/owner of the store page to believe Honey promoted their products and referred the user to their site. In reality, however, the user was ALREADY on the store page purchasing products and was never referred to the page by Honey. That's affiliate marketing fraud and this specific type is known as cookie stuffing. Cookie stuffing is considered wire fraud by the US government and FTC. So, Honey, as well as paypal, being the parent company, are indeed breaking the law on a federal level, and everything they are doing is classified as such
BTW... a Class action suit has already been filed for intentional interference with contractual relations and intentional interference with protective economic relations. I hope this runs paypal into the ground for this BS!
Oh this is just the beginning...they will probably face federal charges too. Honey is engaging in cookie stuffing which is considered wire fraud by the US government and FTC. Paypal will be saying hello to the FBI, as well as possibly the DEA, Homeland security, and IRS.
Question: Wouldn’t the influencers who did not take a sponsorship - and thus, could not have agreed to have their affiliate commission poached - be the ones with a case against Honey? And what about the stores themselves? Wouldn’t the affiliate poaching have a negative impact on their ability to determine how effective affiliate marketing is? Not to mention, the sheer fact that they’re essentially being tricked into paying commissions to someone who didn’t do any of the work referring a customer to the store, and thus defeating the entire purpose of having an affiliate program, and potentially discouraging others from referring potential customers. That is to say, regardless of what is in the contract for customers, sponsored influencers, and stores - what about those that have zero relationship with Honey to begin with? They didn’t agree to any of this.
Yeah she doesn't understand how any of it works. A simple google search gave me a plethora of information and shined light on the reality of what Honey and paypal are invovled in right now. Honey is engaging in affiliate marketing fraud. The specific type they are engaging in is known as cookie stuffing. Cookie stuffing is when someone forces clicks or alters other affiliate cookies on a user's device replacing the cookies with theirs. This tricks a merchant/owner of a store page into believing that person was the one who referred the customer to the store page and they get the commission for it. One way of cookie stuffing is with adware, or popups. This is exactly what Honey does via its popups. When a user clicks on the popup, it opens a separate URL page unknowingly on the user's device, thereby tricking the merchant/owner of the store page into thinking Honey promoted their products and referred the user to the site. In reality, however, the user was ALREADY on the store page and was not referred there by Honey, but they still receive that affiliate commission. Cookie stuffing is considered wire fraud by the US government and FTC, which means it's a federal crime that invovles the FBI as well as other agencies potentially like the DEA, Homeland Security, and IRS. To answer your questions.... It affects everyone who used or had affiliate links. The user even without an affiliate link that used Honey allowed Honey to gain a commission from the merchant/store/retailer via the popup trick. Merchants usually have affiliate contracts and clauses that protect them from affiliate marketing fraud so they can go after the culprits. For example they'll look at red flags on commission data and affiliate links they paid out to (they keep records of cookies, links, etc.) Merchants are indeed affected by this gravely. It would cost merchants alot of commission money if the commissions are fraudulent. Most likely making them stop doing affiliate marketing or raise prices to balance the losses. And to add to everything above...I believe that's what part 2 of megalags video on Honey will be about. Honey extorting companies into partnering with them and also forcing other companies to raise prices due to their negative influence on the companies.
Dont forget. Scrubbing and replacing influencer's cookies, it effects their business partner's future endeavor. Saying according to the click history, it appears that tge influencer is under performing and decide to end partnership.
That's the point that has hurt my other channels. Looks like I am not gaining sales yet comment after comment saying they used my link. But nothing shows up. Lost three agreements with companies even though my channels have been growing on all aspects.
Wendover Productions, Legal Eagle and others now officially have a class action lawsuit I imagine the dog-pile of influencers is going to be quite large.
Not just influencers.. ANYONE who has ever used or uses affliate links. Honey steals ALL commisions, regardless of where the link comes from (ie.. everyone, even if they have never dealt with Honey ever)
Also, I've seen one amature analysis on the "affilate contract" side of the equation. A creator who does a lot of afflialte sales was looking thru many of the contracts he has to sign in order to even get an affliate link to use for a given ecommerce platform and it would seem that what Honey/Paypal is doing breaks the very first clause of every single one of them. Again, just an amature analysis of the contracts, but I wonder: 1) If this could bring another class action suit against Honey/Paypal from the ecommerce platforms for breaking the affliate link contracts between them and Honey/Paypal or 2) If any of these ecommerce platforms (specially the larger ones) had a "special agreement" with Honey that they wouldn't make a fuss about Honey stealing others afflilate links, if it could open up those ecommerce platforms to these class actions that are already being filed? This may go WAY deeper than just Honey/Paypal. Because I would have to believe that the larger ecommerce platforms HAD to notice "Gee.. why has paypal commisions gone way up while everyone else's have gone down?"
Honey is engaging in affiliate marketing fraud. Specifically, cookie stuffing. This isn't about last click attribution thing at all, which is the legitimate way the affiliate links work. Honey is actively engaging in altering existing cookies or forcing clicks to insert their own cookies on a user's device by having them click a popup, which could be considered adware, that opens a separate URL unknowingly on the user's browser. This tricks the merchant/owner of the store page into believing Honey was the one who referred the user to the site and promoted their products therefore they should recieve the commission. In reality, however, the user was never referred to the site by Honey becuase they were ALREADY on the site purchasing products. Cookie stuffing is considered wire fraud by the US government and FTC.
@@maugseros8347 so that takes care of a contract for the promoters. They are stealing from people who have nothing to do with them, so they have no contractual arrangement
I have never used honey or PayPal. I have noticed my affiliate links are not doing well even with a good number of people clicking on the links. Clicking on the affiliate link is recorded with the company, and track so I can see how well the link is doing. The purchase is separately tracked, but if the cookie is change on checkout, I receive no money. I do all the work and don't get compensated.
I never signed anything or even installed it myself. I had a situation where my affiliate codes for watches from a brand I was reviewing never created commissions, even though I could track the original clicks. I dropped them and their platform and I vowed to NEVER use affiliate links in any video ever again - it even stopped me from making videos since it happened. I made a video about it on my channel (the last one I made) I'm trying to get over it but I worked so hard and I'm tiny. I can't begin to fathom how much some people might have lost through this. It's sickening.
But what about the influencers who have never worked with Honey and still had their affiliate commissions stolen? Like there are plenty of people who don't have any relationship with Honey and have signed no agreement with Honey whatsoever. But their cookies are still being replaced and their commissions stolen.
you were reading the TOS between Honey and Consumers/Customers...not the agreement between Honey and Influencers. Even then, the Affiliate hijacking is done on ANY affiliate link on EVERY device that has the Honey Extension.... not just for Honey Partner links.
The focus that is being given to this SCAM is too narrow, because there is almost no one who has even mentioned that TH-cam influencers are not the only victims, because in addition to the users of the honey extension who are scammed by not always receiving the supposed coupons that they promise, the victims are ALL those who post affiliate links, because it does not only work within TH-cam content, but it must work with any type of link, including hyperlinks in writings in any type of Blogs Consider that the links, whether active or inactive, lead to the sales page where the affiliation key appears in the URL and is the one that is saved as a Cookie and that Honey, through bad practice, replaces with its own cookie by discreetly opening a pop-up window of a tab type within the same browser. Therefore, any blogger, content creator such as podcast or video can be a victim, without ever having mentioned Honey
And by the way, all those who Honey has been stealing affiliate commissions from and who have never had any contact with Honey, NEVER signed a contract that allowed Honey to steal their commissions.
Content creators, merchants, and users are affected by this because Honey fraudulently took commissions through a popup and hidden url switch. Users of Honey were used to make them money. Its not just affiliate links and swapping their cookies. Honey is adding their affiliate cookies on any site they are affiliated with and maybe even not at this point tricking the merchants into giving them commissions for stuff they didnt promote or refer consumers to. This would cause basically an influx of payouts for commissions from more sources than the merchant can afford. That affectively cause them to stop the programs or raies prices or both.
The ones getting really screwed here are smaller content creators. If their followers have Honey installed, it poaches their links, they go bankrupt. The big boys have enough cushion to eat a bit of lost revenue (assuming they weren't in on the scam the whole time), and can afford to sue to get compensated. The consumers get slightly worse deals than they would without Honey, they can afford it, if they were already buying the product without the discount.
They also do not have contractual relationships with every affiliate, resulting in their diverting commissions of 3rd parties without their consent or knowledge.
it would be fun (and appropriate) to see a major retailer ban honey for affiliate poaching. just drop honey from your affiliate program. it would be great press.
Honey takes commissions from influencers who have no Honey affiliation. We did a small amount of affiliate sales with our old business (craft supplies sales and crafting how-to videos). We never had any association with Honey, but for any purchase where one of our supporters clicked on one of our affiliate links to make a purchase, and then used the Honey browser extension, we would have lost those commissions.
There are two clues that show problems with Honey. First, even if some influencers DID sponsor Honey and signed a contract. There are some influencers that did not sign any kind of contract. If a viewer of said influencer clicked on their affiliate link and Honey TAKES the commission, then the influencer is receiving unjust damages that are outside of their control. So, I would say ANY influencer/website that has affiliate links are getting robbed from Honey. Second, Linus Tech Tips asked Honey to stop replacing affiliate links. That is the other clue that Honey did not put the language within the contract. If LTT asked them to stop, even after signing the contract, it would seem clear that the language of stealing affiliate links was not included. One last detaill that heard from another lawyer on TH-cam though is that regular consumers (those that downloaded and used the extension) CANNOT get into a class action lawsuit because the terms of service talked about how the consumer is waving their right for a trial, it HAS to go through arbitration (that Honey controls). So, even if a consumer that give PROOF that Honey was misleading on the coupon codes, they won't be able to join others and file for... what is it... loss? Not sure, not a lawyer.
21:08 several people on the other end of affiliate marketing had been claiming that pretty much all coupon-searching apps/extensions/sites do some variant of this, so it could be a standard practice for them. On the other hand, since most influencers never signed any kind of contract with the coupon search companies and weren't aware this is happening, while the companies offering affiliate deals certainly did and certainly were, they're the ones paying the coupon company after all... Could it be that it's them who are liable for not disclosing to the influencers their commission can be poached like that? Also, there's a video from a former Newegg marketing exec who claimed that he insisted Newegg partnered with an affiliate management company that did use shared commission model specifically to avoid this, so even if a coupon company replaced the cookie, the original referrer still got something. So, if you're the one offering those deals to influencers, there are options to at least mitigate this, even if you work with both genuine affiliates and the coupon companies, and some major companies did use those options, so not doing so is likely less of a standard practice for them.
Class action, from what I understand from another youtube lawyer, cannot be used by anyone who downloaded and used the extension, aka the consumers. Their only avenue is to use arbitration.
@novocode yes but those influencers who filed lawsuit never used honey... Honey poached all commissions not just commissions of people who had a contract with them
@@TrimutiusToo I'm aware, sorry, just trying to add to your comment so those that felt like they could get in on the class action might not have that avenue. Influencers = yes, consumers/honey users = no.
Honey Gold is proof of how low PayPal has fallen ... stealing commissions. But what the biggest surprise is, was the lack of protests from content creating heavyweights
@@ChurchOfTheHolyMho first of all, not every huge influencer was sponsored by honey. 2nd, I'm pretty sure an NDA covering scam, especially if 3rd parties are the victims, is invalid.
I'm fairly certain the contract with honey for LTTs sponsorship deal had non-disparagement clause in there. Same with others that they had sponsorship deals with. Of course that doesn't stop all those not actually being sponsored.
@@RoterFruchtZwerg It is complicated, but yeah, any such clause probably doesn't apply if talking to government regulators or in a court case. That said, the question then becomes is it worth fighting paypal's lawyers over it?
@@EwanMarshall Thanks for that clarification. That was more or less what I was thinking, but didn't state clearly. As for @RoterFruchtZwerg's note about NDAs being invalid for a scam - I don't know... Good point though! and I guess at this point, we don't know if we have a scam - although it sure does seem like it! Good comments! Thanks!
It's not just the influencers being scammed. It's everyone using Honey. If a company partners with Honey, the company can tell Honey that certain coupon codes will not and cannot be added by Honey. So it's literally taking your discount away.
Since Legal Eagle and other law firms have launched a class action, surely they have already gone through the TOS and identified it has/hasn’t been stated. Of course they may be approaching it from another angle.
8:44 Small correction "Honey Science LLC" is based in Los Angeles, USA, not in the UK. The Terms of Use here are for the UK and Europe, as indicated by the "Users Based Outside the UK" section, which sets the governing law to that of England and Wales. The version for Poland appears to be a Polish translation of the UK and Europe ToU. The US version of the ToU is with "PayPal, Inc." and sets the governing law to that of the State of California, USA, and includes an arbitration clause and class action waiver. The rest of world version of the ToU is with "Honey Science LLC" also sets the governing law to that of the State of California, USA, and includes the arbitration clause and class action waiver. 32:38 "Honey Offers and Third-Party Links" this section looks like it is addressing the European cookie laws from GDPR and the ePrivacy Directive (the "In order to improve our services" bit is needed to address the scope of the tracking). The corresponding section in the US ToU, "PayPal Offers and Third-Party Link" uses different wording but appears to be similar.
An "arbitration clause and class action waiver" can only apply to people that entered into an agreement with Honey (eg: Installed the Extension, took sponsorship), it cannot be used as legal protection from any damages to third parties, damage created by the malicious replacement of affiliate data.
1. there already is a class action by legal eagle and wendover productions. 2. what if I have a YT channel, have affiliate links, but I never signed up for Honey and never had any partnership with them? presumably, I "lost" commission from anyone who clicked my affiliate link and used Honey after, would I be able to join the class action?
Oh its very much illegal...federally so even. Cookie stuffing, which is what Honey is doing, is considered wire fraud by the US government and FTC. So paypal can expect FBI knocking at their door at some point along with possibly the DEA, Homeland Security, and IRS.
He doesn't explain it well, but it will take the affiliate link of *anyone*, it doesn't matter if they're partnered with Honey or not. If you have never been involved with Honey at all and have an affiliate link, and I click on it, but have Honey, it will steal your commission in spite you never ever having ever had contact with Honey for any reason.
The part that gets me is that the Honey app is downloaded by consumers, so the customer could click it after clicking an affiliate code of a creator that has no affiliation with Honey and they still lose their commission.
It's not about the influencers that had an agreement with Honey for me... it's all about the reviewers and influencers that engage in affiliate programs and never even had any involvment with Honey. There's no way that these people weren't farmed by Honey with zero agreement or inducement. That's the juicy question for me. Further, there's the conflict of interest between the claims Honey made to users and sales oriented partner and non partner businesses. The Better Business Bureau started an investigation into their advertising claims and dropped it when they agreed to change. Still, that doesn't take away from the fact that they were selling an outright lie at the start and an implicit lie forward of that... not good.
Advertising falsehoods over the internet is wire fraud. This is especially true for old ads on the internet that are embedded in old videos. Let's say an influencer peddled a produced two years ago in a video that turned out today to be false, but the influencer didn't know it then but knows it now. If those ads are still embedded in those videos I believe those influencers should be held guilty of wire fraud. In the example given above, I believe Linus Tech Tips would be guilty of wire fraud, because the company knew what was happening yet is still advertising the product in older videos according to the video.
Since so many comments mention that this affects affiliate links of influencers that did not promote Honey and therefore never entered a contract with them: You should rather have a look at the contracts for affiliate partners of e.g. Amazon or Newegg and if these contracts cover what Honey is doing. That should be the relevant contract being breached, even if the influencer does not promote Honey. It should define under what circumstances it is acceptable to pay out a commission or not. And if faking a click on an affiliate link is ok.
Faking clicks is generally against any affiliate program and have reprecussions depending on what it is they have done. In this case forcing clicks or altering other affiliate cookies is known as cookie stuffing, a type of affiliate marketing fraud. You might be asking "how is that fraud if you have last click attribution as explained in the original video?" Simple...Honey isn't referring the consumer to the store page or promoting the product. Honey is actively engaging in altering an existing affiliate cookie or forcing clicks to insert their own affiliate cookie via popups, which could be considered adware. You might now be asking "how is that adware? Its a popup on an extention." That's exactly what adware is, a popup, and using adware is one way cookie stuffing is done. Honey's popups open a separate URL unknowingly on the user's browser when the user clicks it. Hence, adware. This action causes their affiliate cookie to appear after the hidden URL is opened. Doing that tricks the merchant/owner of the store page to believe Honey was the one who referred the user to the site promoting thwir products, and therefore deserve to receive the commission. In reality, however, the user was never referred to the site by Honey because they were ALREADY there on the site purchasing products prior to the affiliate cookies being swapped or inserted. That is clear affiliate marketing fraud and cookie stuffing. Cookie stuffing is considered wire fraud by the US government and FTC. A federal crime.
Any influencer without a relationship with Honey has certainly not agreed to anything. You should take a closer look at the contract with the affiliate provider, such as Amazon.
Something i have not seen addressed and maybe it will be in part 2, is that if businesses that are partnered with honey are also partnering with influencers with affiliate link pay, could they be liable for lying to the influencers, because they know that honey will be stealing commissions?
So stealing the commissions was always the Honeyplan, otherwise, how would they make any money? Why would PayPal buy Honey and enter this specific industry unless there was money to be made hand over fist, regardless of shadiness?
YES!!! Markiplier was one of the only big influencers to not to a Honey deal and called them out as "Shady" because they weren't transparent on how they were making money. Linus Tech Tips figured it out a couple years ago and ended relationship with Honey, but they didn't make a big stink about what Honey was doing and are getting some backlash for that.
Note about this switcheroo working in brick-and-mortar shops. I worked for a retail company selling high-end products. I had a manager who was fond of swooping in and finishing transactions (to improve the customer experience) while I was off confirming we had the chosen options in stock. Under her keycode, not mine. So the commission paid went to her. She managed to get written up in the company organ for "biggest sale of the region". My sale. She also managed to terminate all of the current crew before corporate got wind of this. ZERO of the stolen commissions were ever repaid to the employees who deserved them.
not only poaching (stealing) from influencers, but also cutting a separate deal with sellers to reduce proposed discount to customers and to give that money to honey 😢😮 double the scam , disgusting way to poach & looting for a profit 😢😮
You seem to be overlooking the fact that, while Honey users and advertisers have their own agreements, there are many individuals and organizations with no prior relationship to Honey. These individuals and organizations are not bound by any agreement with Honey, yet they are still having their commissions stolen.
@TopMusicAttorney, you missed the biggest part. At the end of this video. Honey has a submit a code feature and they are adding codes for people not affiliated with honey and then that costs those stores a ton of money where they get hammered with discounted sales that cost them thousands or hundreds of thousands of dollars. That has to be illegal. NO contract was signed but somehow these stores find themselves in business with honey taking their profits.
even people with affiliate marketing links with no ties to honey get their commission stolen. There is no doubt this is a big scam and at the very least unethical and hopefully very illegal, where they get penalised for their sneaky business practice.
I feel like companies as large as Paypal do the legal math of "how much money can we make, and how much money will we have to pay when we get caught?" and I guarantee you even if the class action lawsuit from Wendover and Legal Eagle is successful, Paypal/Honey will still come out as VERY profitable.
Not if its proven they indeed knowingly akd actively engaged in cookie stuffing, which megalags evidence proves without a doubt by itself. Cookie stuffing is a federal crime because it is considered wire fraud by the US government and FTC. So, paypal might have FBI knocking at their door soon.
A Web Developer that is also a Influencer and has programed his own Browser extensions has posted a Video, where he explains in Detail how they do it from a Technical Standpoint. It absolutely is illegal and does 100% violate the Terms of Services. This is really a BIG THING because it seems, that Amazon made an agreement with Honey. If this is true, and i do believe it is- that would make this Scandal even bigger then it already is Video! Title is: "How Honey got away with it" the Channel's Name is "Theo Rants".
Yeah its affiliate marketing fraud that Honey is engaged in. Specifically, cookie stuffing, which is considered wire fraud by the US government and FTC.
The contract with influencers who market Honey is irrelevant. This is impacting affiliate links for ALL links. So person who has never interacted with Honey as an influencer are having their commissions hijacked. It's that simple, now is it illegal? That's a different question but you are fixating on an element that's not the primary issue.
Yes! The relevant contract is the one PayPal has with the companies that pay out commissions (Newegg, Amazon and the like). It should say under what conditions a commission is allowed to be payed out and if simulating clicking a link in the background without the user ever noticing is acceptable or not. If that is not acceptable, Paypal is breaching that contract.
Honey takes the comission REGARDLESS of the affiliate link and the influencer. Even ones that had nothing to do with Honey could have their comission removed by Honey, if the visitor has the extension and uses it. The TOS would work between them and the user, but that would be shady at least, because the original influencer who sent the user to the site has no say in it
You're missing the point. Honey is stealing affiliate commissions from affiliates who were never influencers for Honey. And the terms of service for people using the extension has no relation to the affiliates whose codes are being usurped.
I like that the Tempest Ring on your index finger matches your hair. I don't know why it stuck out to me so much while watching this. Anyway, as others have belabored: Honey is overriding affiliate links regardless of whose it is, whether Honey or Paypal has an agreement with them or not. And it's not just this one-time sort of misleading transaction to anyone with an affiliate link. Honey wants to be part of EVERY transaction, and the last step prior to purchase for each of them. It's not just taking that affiliate money one time, it is aiming to do so in perpetuity by making itself a (albeit optional) part of the transactional process and ingrain itself into customers that use it.
Most people/companies that make money using affiliate links have never advertised for Honey nor have they ever had any business dealings with Honey nor have they signed any contracts with Honey. Honey poached their affiliate links regardless. My question is... Does such poaching of affiliate links violate the affiliate link contracts.
Havn't finished this yet, but TOS was questioned twice as of 12:22, but here is a fairly nuanced scenario that is more important than any discovery regarding any TOS. 1. Let's imagine that you have merchandise available on Amazon or have some other affiliate relationship with a third party company. In this scenario, you have had zero communication with Honey or Paypal, and as such any TOS for the service does not relate to your company. 2. Let's say that 1-20% of users who initially followed your affiliate link to purchase products that you recommended. 3. Honey offered to check for coupons and stole the cookies of those 1-20% of people that had the plugin installed. 4. Paypal instead received your commission, the user of the app did not get a discount. Result Part A: You lost direct revenue for each sale. Result Part B: You potentially lose the ability to renew your affiliate agreement the next year with your affiliate partner (or are offered a lower conversion rate due to underperformance). In this scenario, you as a creator were affected though you never even talked to any person related to Paypal. I would think that this is illegal. And if it's not, it should be.
Yeah what Honey is doing is affiliate marketing fraud. Specifically, cookie stuffing. Cookie stuffing is when you force clicks or alter affiliate links on a user's device to replace or insert your own thereby tricking the merchant into giving you the commission for the sale. One way of doing this is via adware e.i. popups. Honey does exactly this with their popups engaging in actively altering cookies or inserting theirs after the user clicks a popup. The popup then opens a separate URL unknowingly on the user's browser that stuffs their cookie onto the device. This act tricks the merchant/owner of the store page into thinking Honey was the one who referred the consumer to their site promoting their products, and therefore, they deserve the commission. In reality, however, the user was never referred to the site by Honey because they were ALREADY on the site purchasing products prior to Honey inserting their own affiliate cookies. Cookie stuffing is considered wire fraud by the US government and FTC.
I think the issue of pointing to the ULLA, is that (even if the end user was aware of what was happening) does the end user have the right to replace someone else's affiliate link? Ie, can I sign an agreement that gives you the right to take money from a third party.
For me the solid legal- possibly CRIMINAL case, is with consumers, who were promised the best deal, then Honey HIDES better deals if a retailer essentially bribes them by “partnering.”
An another point regarding the inconsistency of Honey replacing the tracking cookie on affiliate links - in order for anyone like a influencer or a business to use affiliate links, that influencer or business must be accepted by that retailer onto any affiliate link account, so this may have been the reason that Honey did not replace the cookie, if the influencer has an affiliate link with a retailer and Honey does not, then Honey would not have an account to refer to in a new cookie, so there would be no benefit for them in replacing the cookie. The ‘inconsistency’ of Honey doing so, needs to be investigated if it was on the same site that this happened. And even then, if it’s on a retailer like amazon which sells a multitude of different items, then there may only be affiliate links applicable for certain items in relation to specialist subjects related to whatever the influencer covers in their videos - eg linus tech talk may have special affiliate links for computer tech because that is their specialist area of focus for their videos. Either way, further data would be needed to try and figure this out if there is such a reason for it.
Surely the problem is not for the influencer, they agreed a deal and they got paid. The issue is the false advertising that both Honey and the influencers partakeed in when saying they would always give the best deal out there. As representatives of the company the influencers could be liable as well as Honey for this in every country that they promoted a service that wasn't as advertised? And that will happen for every country as their watcher partook in the sale in their countries. So sale in each country. It could even be said that the companies that teamed up to defraud the customer could also be liable as they were using Honey to falsely advertise deals, and knew they could make customers not get the best deal.
No, you don't seem to understand. Once a person installs Honey, it poaches ALL affliate links. It has nothing to do with a creator promoting honey or not. For example, If you started a blog tomorrow reviewing tools, and you had affliate links to the tools you are reviewing and you have had ZERO sponsorship deals with anyone at all (not just Honey), and someone clicks on one of your affliate links and they have Honey installed... Honey/Paypal is going to steal your commission. So like in MegLags video.. he got an affliate link for NordVPN. He has NEVER worked with Honey. He signed up for NordVPN using his affliate link 2 times. One time on a browswer without Honey, and one time with a browser with Honey installed and when Honey was installed, it stole his commision. So if you have Honey installed, they are stealing ALL commisions.. it doesn't matter if the referor has ever worked with promoting Honey at all.
One problem is old embedded advertisements that are still active. This video said this was the case with Linus Tech Tips. If the video is true, the company knows now what it was peddling was false yet still has up dozens of videos with the old advertisements. Other influencers are in the same situation. These people have to take down all the old videos with those advertisements and edit them out. They could be liable for leaving those advertisements in.
@@maugseros8347 I am not talking about the people not connected to Honey. I am saying that anyone who ever advertised Honey are potentially at risk of being included in false advertising legal actions, especially if they knew of the potential issues, e.g. LTT. Every government has false advertising legislation. And as each sale was carried out in each country, then every country could go after Honey, it doesn't have to be done only in one location, like the US. Unfortunately though, as agents of Honey the influencers could be included in the trial. Not necessarily to get compensation from, although that might be cheaper for the influencer than paying court costs, but to target anyone who might have evidence needed to get Honey.
But to be honest they can take someones affiliate link and switch it with there own to an influencer that didnt promote them they will switch it with anyones affiliate link dosnt matter if you worked with them or not
Yeah paypal is involved in this too, there is no way they couldn't have known this was going on. I have been skeptical about paypal ever since they started messing with Crypto currency and especially after experiencing an incident in which an extremely important security preference pertained to logging in i found disabled when it previously was enabled.
From someone claiming to be a lawyer I would expect a bit more research and ability to understand. The Honey extension overwrites any affiliate code on sites where it works. Not just the codes of people who have a contract with Honey. Imagine a content creator, who has no affiliation with Honey, but who has an affiliate link to a product on B&H Photo Video for instance, a viewer of their channel has the Honey extension installed and clicks the affiliate link, then uses Honey, and then makes the purchase. Honey will still have overwritten this creator's affiliate link, despite the fact that this creator has no relation, and no contract with Honey. So arguing a terms of service defenses isn't valid here, at most it would prevent some creators from pursuing further action, but not all.
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Legal Eagle and some others have filed a lawsuit. They made a video about it.
There's already a class action, that has been filed. I tried to post the reference in your comments, but it looks like the filters keep removing it.
@@RenNotRen correct.
It's also important to note that there IS NO CONTRACT between the influencers & Honey.
Any ToS here would be between the browser extension user & Honey - but it's the INFLUENCERS who are (allegedly) being defrauded, and there is no apparent commercial relationship between them.
I'm an ethical hacker who graduated law 3 decades ago, and I think some reverse engineering of this extension will help demonstrate that Honey's behaviour in replacing cookies is indiscriminate.
You seem to have misunderstood a key point in this video. The contract with the influencer doesn't matter because they are punching commissions even from those who aren't partner. If you yourself have a commission link in you video and I click it so you can get a kick back, but I have honey installed, you will lose that commission and they will get it. You haven't signed anything with Honey, but they are taking the commission anyway.
@@davidlisteresq It's even more sinister than that, which is what the class action hints at: brands track affiliate performance based on affiliate links. If you don't bring them any sales or very little sales, they won't partner with you in the future. Honey destroys sponsorships for influencers. Literally, actively.
The contract shouldn't matter because the affiliate codes are being stolen even from influencers who aren't associated with Honey.
Yep, I Just said this.
@@Dayanto There are lots of people who do not use honey at all and have affiliate links to things. People like Twitch Streamers, Facebook and Instagram influencers and just regular people who do not have very many sponsors or do ad reads for their small channels. Those are the people being hit the most by the Honey swap.
So the second example he shared should help with this case, he hasn't had a contract with Honey before he just made affiliate link and Honey took it when he used it.
Exactly. If there was even a contract or agreement, then it was with the user installing the Honey plugin. But the user was led to install the plugin under false pretences as they were told they would be getting the best deal (which they don't).
However when Honey replaces an affiliate link of mine, then there is no contract between me and Honey, so they actually steal my commision while I may have led the buyer to the checkout page.
There is no contract between Honey and the people they rip the commision from and it is also at least unethical how Honey shows a popup to tell you there are no coupons and by clicking the pop-up away you 'give' the last click to Honey so they can get the referral link.
I am not a lawyer, but to me this sounds like misleading people to make the click without clearly stating that clicking it will hand all affiliate money to Honey.
@@TD-er Well said!
You missed the point. This isn't just something that affects Honey's influencers, but everyone who uses affiliated links. This browser extension steals everyone's commission. So regardless of where it's mentioned in the terms of service, those people never made an agreement with them.
This is criminal period. It's fraud. Like you said, it steals from people who never agreed to use honey. Honey needs to be banned and paypal sued.
Yes she is not a good lawyer! Very few influencers have a contract with honey
@@qbi4614 No, you just don't get how tort law works. She is right the first thing to do in this case is to check the user's TOS to see if they Honey covered their asses.
To her credit, the original video was a bit confusing, because he used the same content creator in the example. He should also have made it clear, that this will happen to anyone with an affiliate link.
I don't know this female lawyer, but I'm sure, if she had a bit of time to think about the video, she would have figured out that part. We aren't all tech savys, who understand the technicalities of a browser extension.
@@akyhnenaw. It was clear in the original video. The point is that having Honey overrides all affiliate links. She didn’t understand
Honey can steal my commission even if I don’t have a deal with Honey. That’s as illegal as it gets.
"even if I don’t have a deal with Honey" Well, that doesn't mean that the customer who installed Honey extension in their browser did not agree on the ToS of the extension. So they could have been formulated a sentence in their Terms of Service document that a user of their browser extension gives them the affiliate earnings because of their service participating as a last step in the chain of purchase.
But seemingly they did not do that.
Thing is: The contract being breached is probably the one PayPal has with the company paying them the commission (e.g. Newegg, Amazon, …). It probably states under which conditions a commission can be payed out. And these conditions usually do not cover faking a user click by opening a tab in the background. They hopefully say that a user must knowingly click an affilliate link. Usually the TH-camrs even need to mention in their video descriptions that their links are affilliate links for that reason.
@@temp50 Well, just because Person A agree that Person B can take Person C money dont mean that Person B was that right since it still person B money. And there is a precedent that what they did here is wire fraud so if it is a crime then the TOS is void anyway
@@temp50 so if I make a contract with my neighbor that states that it's ok to steal money from you and my neighbor and I both agree, then it's perfectly OK for me to steal your money?
@@temp50 That is not even remotely how things work... Like goodness. A contract like that can not apply to a person who has never seen or engaged with the product. In this case we're talking about a viewer using Honey on a page they went to by an affiliate link from some creator who doesn't have Honey and has never done business with them. Honey can not legally bind this creator to a contract saying they're allowed to steal their money, just because a viewer the creator was unaware of used a product on say Amazon or something. Caffin8tor's example is pretty good for explaining why your statement simply makes no sense.
You don't need to be involved with Honey to have them take your sale.
What does this even mean
@@mymusicpublisherlol... Got me too 👊🤣👍
@@mymusicpublisher It means that everyone is affected, not just the people who were sponsored by honey. The people sponsored by honey are the ones who promoted the browser extension, which in return, got them to 20 million users. So a lot of people had honey installed so if a user clicks on any affiliate links by any content creator (even ones who have nothing to do with honey), and that same user clicks the honey extension when checking out. Honey takes the commission.
@@mymusicpublisher it means that having honey on your browser will swap any affiliate code with their own when checking out. So Honey is doing this to creators who do not even promote the service.
@@mymusicpublisher It means anyone with affiliate links, even those that have no contract with honey can have their commissions stolen by honey.
There are thousands of influencers who aren't in a sponsorship contract who have also gotten their money and sales stolen. those who haven't signed anything with honey/paypal will still get robbed by them
Yep. It goes so far beyond influencers. Anyone who genuinely promotes online sellers can have their commission stolen by Honey. The example of the real-life TV salesman explains it perfectly - he has no agreement in place with the Honey guy.
22:30 - The part you are missing, is that Honey didn't only poach the affiliate income of the influencers, that promote Honey (and hence have a contract with Honey), but poaches ALL affiliate income. Also the income of those influencers, that do not promote Honey and have no contract with Honey.
So there are damages to third parties here.
this right here is where the class action really gets its legs. it also sounds very much like an fbi open up kind of thing.
Andrew Miller overwrote Amazon's cookies. He got $2M and a jail sentence.
The overwriting was considered fraud. The Honey's "We found nothing" mechanics look similar.
The way they're getting around that so far from a legal perspective is that they don't actually modify the cookie themselves, they open a new tab, with their affiliate id in the URL, and because of "last click attribution" the site itself (for example Amazon) then sets the cookie, and then the tab closes. In the end it still amounts to the same thing, but they're not directly editing the cookie and so they will attempt to use that as a defense, and thus the argument likely won't benefit from established precedent.
@@DreadKyllerYeah, they don’t change the cookie, they just steal it as it is.
@@DreadKyller they are just getting last click. The reason the original poster said he couldn’t figure out why sometimes the link didn’t get switched and sometimes honey found a great discount. If that site goes by first click then honey can’t steal it, as they are last click
The terms are important, but "influencers" who have no agreement with Honey still get poached.
Also "non-influencers" and non-TH-camrs. Anybody who provides affiliate links.
Only at 8:23 currently and this may be addressed a bit later, but this isn't happening to just the affiliates promoting Honey. This happens with anyone's affiliate link even with people who do not promote honey. Having the Honey extension indiscriminately does this to all affiliate links for any product from what I understand.
It never gets addressed.
It's also annoying how everyone keeps saying TH-cam influencers get their commissions stolen without mentioning anyone else. It's like they think that TH-camrs are the only ones on the planet who provide affiliate links.
@@gigglybeastThey do mention bloggers, but it's only briefly and for the example of who gets the commission. Mention was if you quit an affiliate link on a blog, but didn't buy, and then you click the affiliate link of the TH-camr sometime later the TH-camr would get the commission.
@@gigglybeast It is because TH-cam is the biggest recognizable platform for that particular situation, plus it is the platform he covered. How it is worded is not the issue. The issue at hand is fraud and dishonest practices he sees.
@@alphadragongamingFTW I would argue that Instagram is actually a bigger platform for this. Yes we are on TH-cam so everyone here uses TH-cam and not everyone uses Instagram.
However, my experience from the other side, I work for a law firm (not as a lawyer) that does investment administration - making sure that the investors money gets spent on the things it is supposed to be spent on, I've never seen the advertising budget on any of the investments I've managed go to TH-cam influencers, but it very often goes to Instagram influencers.
One thing I didn't think about until the Wendover Productions class action that was filed...
Honey is completely screwing up marketing campaigns... Let's say you are a company with no Honey affiliation and you run a giant marketing campaign to increase sales with Vendor A to get a lower price for your subscribers... When Honey comes in and steals the sale - your marketing campaign is not leading to sales (since Honey "made the sale") - and thus the company is not able to negotiate better volume discounts. They are screwing up marketing conversion numbers - and the company's leverage to negotiate with the vendor. I totally missed that aspect.
@@ChurchOfTheHolyMho This is true to an extent however there's a pretty good chance that many companies also collect metrics on when affiliate codes are used based on that initial affiliate link click.
Which makes the lawsuit pretty interesting because in theory there could be a lot more buried data on how many affiliate links were used that were eventually poached by honey as well as wether or not the honey 'sales' actually resulted in any discounts.
Now, that info would be spread across thousands of stores with varying metrics and retention, so it's not necessarily going to be easy to compile, but the data is, in theory, out there.
So discovery will be interesting.
The contract between youtubers and Honey are irrelevant.
Once the browser extension is installed, it'll steal from anyone regardless if they have ever worked with Honey.
For example, let's say that you have a TH-cam channel, and you have never ever worked with Honey. You use affiliate links to make some extra money.
I installed the Honey extension because some other youtuber told me to. Honey is taking your money too, and anyone who's links i click on.
If you have affiliate links, they've been stealing from you for a while and you probably never heard of them before.
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Honey also poaches commissions from influencers that never even had any contract with them
They also poach commissions from businesses/people that aren't "influencers" and have nothing to do with TH-cam. Lot's of business websites provide affiliate links.
Also also, they're getting money from random people who just have the app installed, inserting an affiliate link cookie even if you, like, just hit the site up because you've used it before and had a need or desire to search up and buy a product.
The commission stealing is indiscriminate, it steals everyone's affiliate commissions whether they ever made an agreement with Honey or not.
Irrelevant and stupid.
@@asapappliance9832 Absolutely relevant.
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Even if you're not promoting HONEY, this can still cause them to take your sale. All the person has to have is the browser extension and it's gonna do the same thing anyway. Those people don't have contacts.... they're being scammed
Stopped using Honey years ago due to them never finding any coupon codes. It was obviously something shady going on but never knew of the affiliate stuff.
@@StoneXue Same! I unfortunately added the browser and took me less than a month to delete it😂
They're stealing from random people too, not only from youtubers/influencers who signed a contract with Honey. They just need you to have the extension installed on your pc and every time you click on the pop-up they can redirect the money towards their own pockets.
Stealing the money even when they're not providing any code and you're just clicking on the "Got It" banner to get rid of the pop-up is just revolting.
8:00 Consider that this doesn't happen just to influencers who work with honey, but every singe time a customer with honey installed purchases something with any influencer's referral link, not only those who have contracts with honey.
Doesn't have to be a "influencer's" link. ANYBODY that uses referral links.
@@gigglybeast nope, it's enough you installed honey, go to checkout and click on any Honey button: they take the commission even without any referral link.
@@gigglybeast Yeah.
I'm no attorney (I only speak pig-latin), but it seems to me that what PayPal/Honey is doing is claiming an automatic referral commission irrespective of how the buyer gets there. If you have the Honey extension installed, here's what happens, apparently: If you clicked a TH-camr's referral link who promoted Honey, it snatches the commission. If you use a referral link from a TH-camr who has NEVER promoted Honey, it still snatches the commission. If you buy something on NewEgg and got there completely organically, *Honey snatches a commission* . When you realize that the sole purpose of the Honey extension is commission-siphoning, wouldn't you have to classify Honey as... malware?
I want a version of Honey that gives ME the referral fee every time I shop anywhere that offers it. Watching this argument between groups who pretend they're not commision salesmen, while arguing about who deserves the commission, only has informed me that I too could be getting that condition. It's my money I'm spending... why do THOSE shmucks think they deserve a vig, ha? I think it's time this block gets a new boss, ahhh? Waddaya mean, "Logan Paul's a made man"? That's not even an Italian name! Hey, where are you takin' me? I'm not supposed to go to the Meadowlands!
@@GizzyDillespeeJust sign up for the affiliate program for whatever sites you do your shopping on so you get paid a commission for everything you buy, and then write those purchases as a business expense for a tax return.
@@GizzyDillespee It get's worse. If you watched MagLegs video, Honey does offer a program where you can earn "rewards" for buying. He showed the example where Honey got a $35 dollar commision, and shared 89 cents with the buyer.
It would be adware cause they do it via popups.
What Honey is doing is cookie stuffing, which is a type of affiliate marketing fraud.
I've made several reply comments on it here in others comments.
But, to sum it up...
Cookie stuffing is basically tricking a merchant into giving you a commission by making them think you are the one sending them the users via forcing clicks or altering cookies on a user's device.
Honey does this with their popups hence adware. When you click the popup the existing affiliate cookie is altered or they add their own onto the users device. They do this by opening a separate URL that tricks the merchant into thinking that Honey was the one who sent the user to the store page. In reality, however, the user was already on the store page purchasing products while checking out.
The US governement, as well as the FTC, deem it to be wire fraud based on past cases involving cookie stuffing
7:45 You're misunderstanding, it's any affiliate link, it has to do with the customer clicking the Honey button, not to do with the influencers that promoted honey. You're misunderstanding is that there is no contractual agreement between influencers that DO NOT support honey, but Honey still does this to them too. So your defence fails. I wouldn't want you as a lawyer.
She's a music lawyer, she's convinced that contract law is God and you can sign away your soul.
The idea of second-order damages literally does not occur to her.
I feel like the "I wouldn't want you as my lawyer" comment is a bit harsh. Megalag doesn't make that point very clear. I hope he does into his next installment. I didn't realize it upon my first watch. But yeah, your point stands that it doesn't matter what's in the contract for the users and influencers since Honey is doing this to influencers and content creators who haven't used or support Honey.
Despite the "contracts" it's still scummy. And stealing. It should be illegal and any contract that binds someone into such an "agreement" (very heavy quotes there) should be illegal.
@@squeebers "Contracts" cannot save people when they violate the law. It's that simple.
@DarkAngelGRM Yeah! True
It doesn't matter if the influencer stops doing business with Honey, because it's up to the end user that has that extension installed on their computer. As long as the end user has Honey installed, the influencer will loose that commission.
"Did you take my commission"
Honey - Thanks for reaching out! Yes, yes we did.
Have a great day!
There's an angle to this that keeps being overlooked by the commentary channels covering this scandal: As a marketer who's also done some affiliate marketing and still does on a small scale, each affiliate program provider has their OWN terms of service that's legally binding between them and their affiliates, and that ToS MAY cover what PayPal Honey is doing as a violation of the STORE's Affiliate Program ToS, and PayPal Honey can't override that contract with their own contracts between Honey Users and Honey Promoters, as the business who provides the affiliate programs IS NOT A PARTY TO THAT CONTRACT. Also, What about affiliate marketers who NEVER AGREED to any terms with PayPal Honey? They're also NOT A PARTY TO THOSE CONTRACTS, yet they are being adversely affected by them.
Honey is engaging in cookie stuffing, which is a type of affiliate marketing fraud.
And, since you engage in affiliate marketing I shouldn't need to explain what any of that is or means.
They alter the existing cookie or insert their own onto a user's device by opening a separate URL. This tricks the merchant into believing Honey is the one promoting and sending them customers to the store page.
In reality however the user was already on the store page purchasing products.
This type of affiliate marketing fraud is considered wire fraud by the US government and FTC
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It seems like she really misses a lot of the stuff that honey is doing especially to people who don't have contracts with honey. And those influencers who never use hanging themselves and never agreed anything with honey. There's Millions of influencers, they could and probably have lost revenue due the honey. Does that mean honey has to give back? At least 35 bucks per influencer. Or maybe every time that they'd made money off in a billion we can't wait. They have to pay that back out. Based on how big the channel is meaning. I need to make any money. I don't know, but they literally stole thousands of millions from influencers who do not have any affiliation with honey. And websites that are not affiliated either. It would be a breach contract between that influencer and that website this not associated.
Right I was expecting more from her. I guess I’ll just stick to legal eagle.
Its actually bigger than just a class action lawsuit....this is federal levels of charges.
Honey is engaging in cookie stuffing, which is a type of affiliate marketing fraud, by opening a separate URL that is altering or inserting their own affiliate cookie onto a user's device when the user clicks the popup.
That popup would be considered adware and tricks a merchant into thinking Honey sent them the user to their store page. But, actually the user was already on the store page purchasing products.
The FTC and US government consider cookie stuffing to be wire fraud and havw already ruled on past cases involving cookie stuffing.
And who handles wire fraud?....The FBI, DEA, Homeland Security, and IRS.
I appreciate the thoughts about contract law and terms of service but coming from the perspective of a certified full-stack web developer this isn't how the internet operates. Opening a new link to get an affiliate code is an alternative action and erases the previous claim. This is fraud without the laws to support it being classified as that.
Honey alters the existing affiliate cookie or insert their own using a popup, which would be considered adware. When the user clicks said popup a separate URL opens unknowingly on the user's device causing the above stuff to happen.
This tricks the merchant/owner of the store page to believe Honey promoted their products and referred the user to their site.
In reality, however, the user was ALREADY on the store page purchasing products and was never referred to the page by Honey.
That's affiliate marketing fraud and this specific type is known as cookie stuffing.
Cookie stuffing is considered wire fraud by the US government and FTC.
So, Honey, as well as paypal, being the parent company, are indeed breaking the law on a federal level, and everything they are doing is classified as such
I don't see how the Honey partner program is different to a protection racket.
'if you don't pay us, we will expose you to high value coupons '.
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BTW... a Class action suit has already been filed for intentional interference with contractual relations and intentional interference with protective economic relations. I hope this runs paypal into the ground for this BS!
Oh this is just the beginning...they will probably face federal charges too.
Honey is engaging in cookie stuffing which is considered wire fraud by the US government and FTC.
Paypal will be saying hello to the FBI, as well as possibly the DEA, Homeland security, and IRS.
Question: Wouldn’t the influencers who did not take a sponsorship - and thus, could not have agreed to have their affiliate commission poached - be the ones with a case against Honey?
And what about the stores themselves? Wouldn’t the affiliate poaching have a negative impact on their ability to determine how effective affiliate marketing is? Not to mention, the sheer fact that they’re essentially being tricked into paying commissions to someone who didn’t do any of the work referring a customer to the store, and thus defeating the entire purpose of having an affiliate program, and potentially discouraging others from referring potential customers.
That is to say, regardless of what is in the contract for customers, sponsored influencers, and stores - what about those that have zero relationship with Honey to begin with? They didn’t agree to any of this.
Yeah she doesn't understand how any of it works.
A simple google search gave me a plethora of information and shined light on the reality of what Honey and paypal are invovled in right now.
Honey is engaging in affiliate marketing fraud. The specific type they are engaging in is known as cookie stuffing.
Cookie stuffing is when someone forces clicks or alters other affiliate cookies on a user's device replacing the cookies with theirs.
This tricks a merchant/owner of a store page into believing that person was the one who referred the customer to the store page and they get the commission for it.
One way of cookie stuffing is with adware, or popups.
This is exactly what Honey does via its popups.
When a user clicks on the popup, it opens a separate URL page unknowingly on the user's device, thereby tricking the merchant/owner of the store page into thinking Honey promoted their products and referred the user to the site.
In reality, however, the user was ALREADY on the store page and was not referred there by Honey, but they still receive that affiliate commission.
Cookie stuffing is considered wire fraud by the US government and FTC, which means it's a federal crime that invovles the FBI as well as other agencies potentially like the DEA, Homeland Security, and IRS.
To answer your questions....
It affects everyone who used or had affiliate links.
The user even without an affiliate link that used Honey allowed Honey to gain a commission from the merchant/store/retailer via the popup trick.
Merchants usually have affiliate contracts and clauses that protect them from affiliate marketing fraud so they can go after the culprits.
For example they'll look at red flags on commission data and affiliate links they paid out to (they keep records of cookies, links, etc.)
Merchants are indeed affected by this gravely. It would cost merchants alot of commission money if the commissions are fraudulent. Most likely making them stop doing affiliate marketing or raise prices to balance the losses.
And to add to everything above...I believe that's what part 2 of megalags video on Honey will be about.
Honey extorting companies into partnering with them and also forcing other companies to raise prices due to their negative influence on the companies.
Dont forget. Scrubbing and replacing influencer's cookies, it effects their business partner's future endeavor. Saying according to the click history, it appears that tge influencer is under performing and decide to end partnership.
That's the point that has hurt my other channels. Looks like I am not gaining sales yet comment after comment saying they used my link. But nothing shows up. Lost three agreements with companies even though my channels have been growing on all aspects.
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Wendover Productions, Legal Eagle and others now officially have a class action lawsuit
I imagine the dog-pile of influencers is going to be quite large.
Not just influencers.. ANYONE who has ever used or uses affliate links. Honey steals ALL commisions, regardless of where the link comes from (ie.. everyone, even if they have never dealt with Honey ever)
@@maugseros8347 Or consumers that used Honey but didn't find any codes when there were codes if they had been looked for.
Wait til there's a federal charge cause what Honey and paypal are doing is wire fraud
Also, I've seen one amature analysis on the "affilate contract" side of the equation. A creator who does a lot of afflialte sales was looking thru many of the contracts he has to sign in order to even get an affliate link to use for a given ecommerce platform and it would seem that what Honey/Paypal is doing breaks the very first clause of every single one of them. Again, just an amature analysis of the contracts, but I wonder:
1) If this could bring another class action suit against Honey/Paypal from the ecommerce platforms for breaking the affliate link contracts between them and Honey/Paypal
or
2) If any of these ecommerce platforms (specially the larger ones) had a "special agreement" with Honey that they wouldn't make a fuss about Honey stealing others afflilate links, if it could open up those ecommerce platforms to these class actions that are already being filed?
This may go WAY deeper than just Honey/Paypal. Because I would have to believe that the larger ecommerce platforms HAD to notice "Gee.. why has paypal commisions gone way up while everyone else's have gone down?"
Honey is engaging in affiliate marketing fraud.
Specifically, cookie stuffing.
This isn't about last click attribution thing at all, which is the legitimate way the affiliate links work.
Honey is actively engaging in altering existing cookies or forcing clicks to insert their own cookies on a user's device by having them click a popup, which could be considered adware, that opens a separate URL unknowingly on the user's browser.
This tricks the merchant/owner of the store page into believing Honey was the one who referred the user to the site and promoted their products therefore they should recieve the commission.
In reality, however, the user was never referred to the site by Honey becuase they were ALREADY on the site purchasing products.
Cookie stuffing is considered wire fraud by the US government and FTC.
The golden rule of life, "there is no such thing as a free lunch". So if you are not paying for a product, YOU are the product. 😊🧙🏻♂️
36:46 Legal Eagle filed the class action lawsuit
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So, is this happening also to TH-camrs that are NOT promoting Honey??
YES, it steals ALL affliate links regardless of the source.
@@maugseros8347 so that takes care of a contract for the promoters. They are stealing from people who have nothing to do with them, so they have no contractual arrangement
apparently there is already a class action lawsuit, and one of the Lawyers involved is LegalEagle..
I have never used honey or PayPal. I have noticed my affiliate links are not doing well even with a good number of people clicking on the links. Clicking on the affiliate link is recorded with the company, and track so I can see how well the link is doing. The purchase is separately tracked, but if the cookie is change on checkout, I receive no money. I do all the work and don't get compensated.
I never signed anything or even installed it myself. I had a situation where my affiliate codes for watches from a brand I was reviewing never created commissions, even though I could track the original clicks. I dropped them and their platform and I vowed to NEVER use affiliate links in any video ever again - it even stopped me from making videos since it happened. I made a video about it on my channel (the last one I made) I'm trying to get over it but I worked so hard and I'm tiny. I can't begin to fathom how much some people might have lost through this. It's sickening.
A class action lawsuit was filed a few days ago by youtube LegalEagle.
But what about the influencers who have never worked with Honey and still had their affiliate commissions stolen? Like there are plenty of people who don't have any relationship with Honey and have signed no agreement with Honey whatsoever. But their cookies are still being replaced and their commissions stolen.
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you were reading the TOS between Honey and Consumers/Customers...not the agreement between Honey and Influencers.
Even then, the Affiliate hijacking is done on ANY affiliate link on EVERY device that has the Honey Extension.... not just for Honey Partner links.
The focus that is being given to this SCAM is too narrow, because there is almost no one who has even mentioned that TH-cam influencers are not the only victims, because in addition to the users of the honey extension who are scammed by not always receiving the supposed coupons that they promise, the victims are ALL those who post affiliate links, because it does not only work within TH-cam content, but it must work with any type of link, including hyperlinks in writings in any type of Blogs
Consider that the links, whether active or inactive, lead to the sales page where the affiliation key appears in the URL and is the one that is saved as a Cookie and that Honey, through bad practice, replaces with its own cookie by discreetly opening a pop-up window of a tab type within the same browser.
Therefore, any blogger, content creator such as podcast or video can be a victim, without ever having mentioned Honey
And by the way, all those who Honey has been stealing affiliate commissions from and who have never had any contact with Honey, NEVER signed a contract that allowed Honey to steal their commissions.
Content creators, merchants, and users are affected by this because Honey fraudulently took commissions through a popup and hidden url switch.
Users of Honey were used to make them money. Its not just affiliate links and swapping their cookies.
Honey is adding their affiliate cookies on any site they are affiliated with and maybe even not at this point tricking the merchants into giving them commissions for stuff they didnt promote or refer consumers to.
This would cause basically an influx of payouts for commissions from more sources than the merchant can afford. That affectively cause them to stop the programs or raies prices or both.
The ones getting really screwed here are smaller content creators. If their followers have Honey installed, it poaches their links, they go bankrupt. The big boys have enough cushion to eat a bit of lost revenue (assuming they weren't in on the scam the whole time), and can afford to sue to get compensated. The consumers get slightly worse deals than they would without Honey, they can afford it, if they were already buying the product without the discount.
They also do not have contractual relationships with every affiliate, resulting in their diverting commissions of 3rd parties without their consent or knowledge.
it would be fun (and appropriate) to see a major retailer ban honey for affiliate poaching. just drop honey from your affiliate program. it would be great press.
Honey takes commissions from influencers who have no Honey affiliation. We did a small amount of affiliate sales with our old business (craft supplies sales and crafting how-to videos). We never had any association with Honey, but for any purchase where one of our supporters clicked on one of our affiliate links to make a purchase, and then used the Honey browser extension, we would have lost those commissions.
There are two clues that show problems with Honey.
First, even if some influencers DID sponsor Honey and signed a contract. There are some influencers that did not sign any kind of contract. If a viewer of said influencer clicked on their affiliate link and Honey TAKES the commission, then the influencer is receiving unjust damages that are outside of their control. So, I would say ANY influencer/website that has affiliate links are getting robbed from Honey.
Second, Linus Tech Tips asked Honey to stop replacing affiliate links. That is the other clue that Honey did not put the language within the contract. If LTT asked them to stop, even after signing the contract, it would seem clear that the language of stealing affiliate links was not included.
One last detaill that heard from another lawyer on TH-cam though is that regular consumers (those that downloaded and used the extension) CANNOT get into a class action lawsuit because the terms of service talked about how the consumer is waving their right for a trial, it HAS to go through arbitration (that Honey controls). So, even if a consumer that give PROOF that Honey was misleading on the coupon codes, they won't be able to join others and file for... what is it... loss? Not sure, not a lawyer.
21:08 several people on the other end of affiliate marketing had been claiming that pretty much all coupon-searching apps/extensions/sites do some variant of this, so it could be a standard practice for them.
On the other hand, since most influencers never signed any kind of contract with the coupon search companies and weren't aware this is happening, while the companies offering affiliate deals certainly did and certainly were, they're the ones paying the coupon company after all... Could it be that it's them who are liable for not disclosing to the influencers their commission can be poached like that?
Also, there's a video from a former Newegg marketing exec who claimed that he insisted Newegg partnered with an affiliate management company that did use shared commission model specifically to avoid this, so even if a coupon company replaced the cookie, the original referrer still got something.
So, if you're the one offering those deals to influencers, there are options to at least mitigate this, even if you work with both genuine affiliates and the coupon companies, and some major companies did use those options, so not doing so is likely less of a standard practice for them.
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Class action against Honey was already filed on December 29th...
Class action, from what I understand from another youtube lawyer, cannot be used by anyone who downloaded and used the extension, aka the consumers. Their only avenue is to use arbitration.
@novocode yes but those influencers who filed lawsuit never used honey... Honey poached all commissions not just commissions of people who had a contract with them
@@TrimutiusToo I'm aware, sorry, just trying to add to your comment so those that felt like they could get in on the class action might not have that avenue. Influencers = yes, consumers/honey users = no.
there is no private agreement . in video he used his own affiliate link and again honey replaced it
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Honey Gold is proof of how low PayPal has fallen ... stealing commissions. But what the biggest surprise is, was the lack of protests from content creating heavyweights
I suspect there is an NDA of some sort. Just a guess.
@@ChurchOfTheHolyMho first of all, not every huge influencer was sponsored by honey. 2nd, I'm pretty sure an NDA covering scam, especially if 3rd parties are the victims, is invalid.
I'm fairly certain the contract with honey for LTTs sponsorship deal had non-disparagement clause in there. Same with others that they had sponsorship deals with. Of course that doesn't stop all those not actually being sponsored.
@@RoterFruchtZwerg It is complicated, but yeah, any such clause probably doesn't apply if talking to government regulators or in a court case. That said, the question then becomes is it worth fighting paypal's lawyers over it?
@@EwanMarshall Thanks for that clarification. That was more or less what I was thinking, but didn't state clearly. As for @RoterFruchtZwerg's note about NDAs being invalid for a scam - I don't know... Good point though! and I guess at this point, we don't know if we have a scam - although it sure does seem like it! Good comments! Thanks!
Legal Eagle has filed a class action lawsuit. Marques Brownlee's video on the subject already has almost 4 million views.
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It's not just the influencers being scammed. It's everyone using Honey. If a company partners with Honey, the company can tell Honey that certain coupon codes will not and cannot be added by Honey. So it's literally taking your discount away.
Since Legal Eagle and other law firms have launched a class action, surely they have already gone through the TOS and identified it has/hasn’t been stated. Of course they may be approaching it from another angle.
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8:44 Small correction "Honey Science LLC" is based in Los Angeles, USA, not in the UK. The Terms of Use here are for the UK and Europe, as indicated by the "Users Based Outside the UK" section, which sets the governing law to that of England and Wales. The version for Poland appears to be a Polish translation of the UK and Europe ToU.
The US version of the ToU is with "PayPal, Inc." and sets the governing law to that of the State of California, USA, and includes an arbitration clause and class action waiver.
The rest of world version of the ToU is with "Honey Science LLC" also sets the governing law to that of the State of California, USA, and includes the arbitration clause and class action waiver.
32:38 "Honey Offers and Third-Party Links" this section looks like it is addressing the European cookie laws from GDPR and the ePrivacy Directive (the "In order to improve our services" bit is needed to address the scope of the tracking). The corresponding section in the US ToU, "PayPal Offers and Third-Party Link" uses different wording but appears to be similar.
An "arbitration clause and class action waiver" can only apply to people that entered into an agreement with Honey (eg: Installed the Extension, took sponsorship), it cannot be used as legal protection from any damages to third parties, damage created by the malicious replacement of affiliate data.
Personally I'm interested in seeing how this turns out because legal eagle has filed a class action lawsuit against honey
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Terms of service are meaningless to the influencers that have had no association with Honey.
1. there already is a class action by legal eagle and wendover productions.
2. what if I have a YT channel, have affiliate links, but I never signed up for Honey and never had any partnership with them? presumably, I "lost" commission from anyone who clicked my affiliate link and used Honey after, would I be able to join the class action?
Thanks for the video. Even if what "Honey" is doing isn't technically illegal, it's most definitely unethical. High tech "snake oil", IMHO.
Oh its very much illegal...federally so even.
Cookie stuffing, which is what Honey is doing, is considered wire fraud by the US government and FTC.
So paypal can expect FBI knocking at their door at some point along with possibly the DEA, Homeland Security, and IRS.
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He doesn't explain it well, but it will take the affiliate link of *anyone*, it doesn't matter if they're partnered with Honey or not. If you have never been involved with Honey at all and have an affiliate link, and I click on it, but have Honey, it will steal your commission in spite you never ever having ever had contact with Honey for any reason.
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The part that gets me is that the Honey app is downloaded by consumers, so the customer could click it after clicking an affiliate code of a creator that has no affiliation with Honey and they still lose their commission.
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It's not about the influencers that had an agreement with Honey for me... it's all about the reviewers and influencers that engage in affiliate programs and never even had any involvment with Honey. There's no way that these people weren't farmed by Honey with zero agreement or inducement. That's the juicy question for me. Further, there's the conflict of interest between the claims Honey made to users and sales oriented partner and non partner businesses. The Better Business Bureau started an investigation into their advertising claims and dropped it when they agreed to change. Still, that doesn't take away from the fact that they were selling an outright lie at the start and an implicit lie forward of that... not good.
that seems like outrageous FRAUD, among other things, what you think, maybe wire fraud too and some other internet type crimes?
Advertising falsehoods over the internet is wire fraud. This is especially true for old ads on the internet that are embedded in old videos. Let's say an influencer peddled a produced two years ago in a video that turned out today to be false, but the influencer didn't know it then but knows it now. If those ads are still embedded in those videos I believe those influencers should be held guilty of wire fraud. In the example given above, I believe Linus Tech Tips would be guilty of wire fraud, because the company knew what was happening yet is still advertising the product in older videos according to the video.
Since so many comments mention that this affects affiliate links of influencers that did not promote Honey and therefore never entered a contract with them:
You should rather have a look at the contracts for affiliate partners of e.g. Amazon or Newegg and if these contracts cover what Honey is doing. That should be the relevant contract being breached, even if the influencer does not promote Honey. It should define under what circumstances it is acceptable to pay out a commission or not. And if faking a click on an affiliate link is ok.
Faking clicks is generally against any affiliate program and have reprecussions depending on what it is they have done.
In this case forcing clicks or altering other affiliate cookies is known as cookie stuffing, a type of affiliate marketing fraud.
You might be asking "how is that fraud if you have last click attribution as explained in the original video?"
Simple...Honey isn't referring the consumer to the store page or promoting the product.
Honey is actively engaging in altering an existing affiliate cookie or forcing clicks to insert their own affiliate cookie via popups, which could be considered adware.
You might now be asking "how is that adware? Its a popup on an extention."
That's exactly what adware is, a popup, and using adware is one way cookie stuffing is done.
Honey's popups open a separate URL unknowingly on the user's browser when the user clicks it. Hence, adware.
This action causes their affiliate cookie to appear after the hidden URL is opened.
Doing that tricks the merchant/owner of the store page to believe Honey was the one who referred the user to the site promoting thwir products, and therefore deserve to receive the commission.
In reality, however, the user was never referred to the site by Honey because they were ALREADY there on the site purchasing products prior to the affiliate cookies being swapped or inserted.
That is clear affiliate marketing fraud and cookie stuffing.
Cookie stuffing is considered wire fraud by the US government and FTC. A federal crime.
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Linus did discuss this in the live streams but yeah they should have made a specific video.
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wendover and legal eagle have a class action started.
Legal Eagle is heading a class action lawsuit against Honey.
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Any influencer without a relationship with Honey has certainly not agreed to anything. You should take a closer look at the contract with the affiliate provider, such as Amazon.
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At 8:00 or so, the important thing to note is that Honey replaces affiliate cookies even where the influencer never had an agreement with Honey.
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Something i have not seen addressed and maybe it will be in part 2, is that if businesses that are partnered with honey are also partnering with influencers with affiliate link pay, could they be liable for lying to the influencers, because they know that honey will be stealing commissions?
Celebrities have been busted for advertising false claims, but I don't know how much the celebrities knew when they were making those claims.
So stealing the commissions was always the Honeyplan, otherwise, how would they make any money? Why would PayPal buy Honey and enter this specific industry unless there was money to be made hand over fist, regardless of shadiness?
YES!!! Markiplier was one of the only big influencers to not to a Honey deal and called them out as "Shady" because they weren't transparent on how they were making money. Linus Tech Tips figured it out a couple years ago and ended relationship with Honey, but they didn't make a big stink about what Honey was doing and are getting some backlash for that.
Note about this switcheroo working in brick-and-mortar shops. I worked for a retail company selling high-end products. I had a manager who was fond of swooping in and finishing transactions (to improve the customer experience) while I was off confirming we had the chosen options in stock. Under her keycode, not mine. So the commission paid went to her. She managed to get written up in the company organ for "biggest sale of the region". My sale. She also managed to terminate all of the current crew before corporate got wind of this. ZERO of the stolen commissions were ever repaid to the employees who deserved them.
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not only poaching (stealing) from influencers, but also cutting a separate deal with sellers to reduce proposed discount to customers and to give that money to honey 😢😮 double the scam , disgusting way to poach & looting for a profit 😢😮
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You seem to be overlooking the fact that, while Honey users and advertisers have their own agreements, there are many individuals and organizations with no prior relationship to Honey. These individuals and organizations are not bound by any agreement with Honey, yet they are still having their commissions stolen.
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@TopMusicAttorney, you missed the biggest part. At the end of this video. Honey has a submit a code feature and they are adding codes for people not affiliated with honey and then that costs those stores a ton of money where they get hammered with discounted sales that cost them thousands or hundreds of thousands of dollars. That has to be illegal. NO contract was signed but somehow these stores find themselves in business with honey taking their profits.
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Pie will be next, the only ad I've seen in weeks
Pie is basically extortion.
Pay us to block our annoying ads.
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even people with affiliate marketing links with no ties to honey get their commission stolen. There is no doubt this is a big scam and at the very least unethical and hopefully very illegal, where they get penalised for their sneaky business practice.
I feel like companies as large as Paypal do the legal math of "how much money can we make, and how much money will we have to pay when we get caught?" and I guarantee you even if the class action lawsuit from Wendover and Legal Eagle is successful, Paypal/Honey will still come out as VERY profitable.
Not if its proven they indeed knowingly akd actively engaged in cookie stuffing, which megalags evidence proves without a doubt by itself.
Cookie stuffing is a federal crime because it is considered wire fraud by the US government and FTC.
So, paypal might have FBI knocking at their door soon.
A Web Developer that is also a Influencer and has programed his own Browser extensions has posted a Video, where he explains in Detail how they do it from a Technical Standpoint. It absolutely is illegal and does 100% violate the Terms of Services. This is really a BIG THING because it seems, that Amazon made an agreement with Honey. If this is true, and i do believe it is- that would make this Scandal even bigger then it already is Video! Title is: "How Honey got away with it" the Channel's Name is "Theo Rants".
Yeah its affiliate marketing fraud that Honey is engaged in.
Specifically, cookie stuffing, which is considered wire fraud by the US government and FTC.
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I’ve always wondered why big companies like PayPal were completely banned in my country since 2016, Now I understand why they got banned....
The contract with influencers who market Honey is irrelevant. This is impacting affiliate links for ALL links. So person who has never interacted with Honey as an influencer are having their commissions hijacked. It's that simple, now is it illegal? That's a different question but you are fixating on an element that's not the primary issue.
Yes! The relevant contract is the one PayPal has with the companies that pay out commissions (Newegg, Amazon and the like). It should say under what conditions a commission is allowed to be payed out and if simulating clicking a link in the background without the user ever noticing is acceptable or not.
If that is not acceptable, Paypal is breaching that contract.
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Honey takes the comission REGARDLESS of the affiliate link and the influencer. Even ones that had nothing to do with Honey could have their comission removed by Honey, if the visitor has the extension and uses it. The TOS would work between them and the user, but that would be shady at least, because the original influencer who sent the user to the site has no say in it
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You're missing the point. Honey is stealing affiliate commissions from affiliates who were never influencers for Honey. And the terms of service for people using the extension has no relation to the affiliates whose codes are being usurped.
I like that the Tempest Ring on your index finger matches your hair. I don't know why it stuck out to me so much while watching this.
Anyway, as others have belabored: Honey is overriding affiliate links regardless of whose it is, whether Honey or Paypal has an agreement with them or not. And it's not just this one-time sort of misleading transaction to anyone with an affiliate link. Honey wants to be part of EVERY transaction, and the last step prior to purchase for each of them. It's not just taking that affiliate money one time, it is aiming to do so in perpetuity by making itself a (albeit optional) part of the transactional process and ingrain itself into customers that use it.
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Most people/companies that make money using affiliate links have never advertised for Honey nor have they ever had any business dealings with Honey nor have they signed any contracts with Honey.
Honey poached their affiliate links regardless. My question is... Does such poaching of affiliate links violate the affiliate link contracts.
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I refuse to use affiliate links for purchases and I hunt down my own discount codes.
Why would you refuse to use them? Don't want to give people you watch any kind of kick back? Seems a bit dickish
@@davidlisteresq They would be helping the influencer at the expense of the retailer.
It depends who they want to help more.
Havn't finished this yet, but TOS was questioned twice as of 12:22, but here is a fairly nuanced scenario that is more important than any discovery regarding any TOS.
1. Let's imagine that you have merchandise available on Amazon or have some other affiliate relationship with a third party company.
In this scenario, you have had zero communication with Honey or Paypal, and as such any TOS for the service does not relate to your company.
2. Let's say that 1-20% of users who initially followed your affiliate link to purchase products that you recommended.
3. Honey offered to check for coupons and stole the cookies of those 1-20% of people that had the plugin installed.
4. Paypal instead received your commission, the user of the app did not get a discount.
Result Part A: You lost direct revenue for each sale.
Result Part B: You potentially lose the ability to renew your affiliate agreement the next year with your affiliate partner (or are offered a lower conversion rate due to underperformance).
In this scenario, you as a creator were affected though you never even talked to any person related to Paypal. I would think that this is illegal. And if it's not, it should be.
Yeah what Honey is doing is affiliate marketing fraud.
Specifically, cookie stuffing.
Cookie stuffing is when you force clicks or alter affiliate links on a user's device to replace or insert your own thereby tricking the merchant into giving you the commission for the sale.
One way of doing this is via adware e.i. popups.
Honey does exactly this with their popups engaging in actively altering cookies or inserting theirs after the user clicks a popup.
The popup then opens a separate URL unknowingly on the user's browser that stuffs their cookie onto the device.
This act tricks the merchant/owner of the store page into thinking Honey was the one who referred the consumer to their site promoting their products, and therefore, they deserve the commission.
In reality, however, the user was never referred to the site by Honey because they were ALREADY on the site purchasing products prior to Honey inserting their own affiliate cookies.
Cookie stuffing is considered wire fraud by the US government and FTC.
This is amazing. Thank you.
Thanks for the support.
I like the gavel going down at the end!!
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I just watch ' To Live And Die In LA.' once every few months. Thank you for what you do! :)
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This makes a good case for the Sponsor Block extension
I think the issue of pointing to the ULLA, is that (even if the end user was aware of what was happening) does the end user have the right to replace someone else's affiliate link?
Ie, can I sign an agreement that gives you the right to take money from a third party.
For me the solid legal- possibly CRIMINAL case, is with consumers, who were promised the best deal, then Honey HIDES better deals if a retailer essentially bribes them by “partnering.”
Class action has been filed. Northern California?
New rule: Don't do business with tech companies because they are more than likely trying to try and make money from something they didn't make.
An another point regarding the inconsistency of Honey replacing the tracking cookie on affiliate links - in order for anyone like a influencer or a business to use affiliate links, that influencer or business must be accepted by that retailer onto any affiliate link account, so this may have been the reason that Honey did not replace the cookie, if the influencer has an affiliate link with a retailer and Honey does not, then Honey would not have an account to refer to in a new cookie, so there would be no benefit for them in replacing the cookie.
The ‘inconsistency’ of Honey doing so, needs to be investigated if it was on the same site that this happened. And even then, if it’s on a retailer like amazon which sells a multitude of different items, then there may only be affiliate links applicable for certain items in relation to specialist subjects related to whatever the influencer covers in their videos - eg linus tech talk may have special affiliate links for computer tech because that is their specialist area of focus for their videos. Either way, further data would be needed to try and figure this out if there is such a reason for it.
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Surely the problem is not for the influencer, they agreed a deal and they got paid. The issue is the false advertising that both Honey and the influencers partakeed in when saying they would always give the best deal out there. As representatives of the company the influencers could be liable as well as Honey for this in every country that they promoted a service that wasn't as advertised?
And that will happen for every country as their watcher partook in the sale in their countries. So sale in each country. It could even be said that the companies that teamed up to defraud the customer could also be liable as they were using Honey to falsely advertise deals, and knew they could make customers not get the best deal.
No, you don't seem to understand. Once a person installs Honey, it poaches ALL affliate links. It has nothing to do with a creator promoting honey or not. For example, If you started a blog tomorrow reviewing tools, and you had affliate links to the tools you are reviewing and you have had ZERO sponsorship deals with anyone at all (not just Honey), and someone clicks on one of your affliate links and they have Honey installed... Honey/Paypal is going to steal your commission.
So like in MegLags video.. he got an affliate link for NordVPN. He has NEVER worked with Honey. He signed up for NordVPN using his affliate link 2 times. One time on a browswer without Honey, and one time with a browser with Honey installed and when Honey was installed, it stole his commision.
So if you have Honey installed, they are stealing ALL commisions.. it doesn't matter if the referor has ever worked with promoting Honey at all.
One problem is old embedded advertisements that are still active. This video said this was the case with Linus Tech Tips. If the video is true, the company knows now what it was peddling was false yet still has up dozens of videos with the old advertisements. Other influencers are in the same situation. These people have to take down all the old videos with those advertisements and edit them out. They could be liable for leaving those advertisements in.
@@maugseros8347 I am not talking about the people not connected to Honey. I am saying that anyone who ever advertised Honey are potentially at risk of being included in false advertising legal actions, especially if they knew of the potential issues, e.g. LTT.
Every government has false advertising legislation. And as each sale was carried out in each country, then every country could go after Honey, it doesn't have to be done only in one location, like the US. Unfortunately though, as agents of Honey the influencers could be included in the trial. Not necessarily to get compensation from, although that might be cheaper for the influencer than paying court costs, but to target anyone who might have evidence needed to get Honey.
But to be honest they can take someones affiliate link and switch it with there own to an influencer that didnt promote them they will switch it with anyones affiliate link dosnt matter if you worked with them or not
Yeah paypal is involved in this too, there is no way they couldn't have known this was going on.
I have been skeptical about paypal ever since they started messing with Crypto currency and especially after experiencing an incident in which an extremely important security preference pertained to logging in i found disabled when it previously was enabled.
From someone claiming to be a lawyer I would expect a bit more research and ability to understand. The Honey extension overwrites any affiliate code on sites where it works. Not just the codes of people who have a contract with Honey. Imagine a content creator, who has no affiliation with Honey, but who has an affiliate link to a product on B&H Photo Video for instance, a viewer of their channel has the Honey extension installed and clicks the affiliate link, then uses Honey, and then makes the purchase. Honey will still have overwritten this creator's affiliate link, despite the fact that this creator has no relation, and no contract with Honey. So arguing a terms of service defenses isn't valid here, at most it would prevent some creators from pursuing further action, but not all.
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well-edited video!
Thank you!