Cohen Milstein represents social media influencers, bloggers, and other content creators against PayPal, Inc. and PayPal Holdings, Inc. for wrongfully and surreptitiously stealing their rightfully earned affiliate marketing commissions through the use of PayPal’s Honey browser extension.
Plaintiffs bring this deceptive, unfair, and unlawful business practices class action under the Electronic Communications Privacy Act (ECPA), Computer Fraud and Abuse Act (CFAA), California’s Unfair Competition Law §§ 17200, California Invasion of Privacy Act (CIPA), Comprehensive Computer Data Access and Fraud Act (CDAFA), and other state and federal statutes.
Important Dates
- On January 15, 2025, plaintiffs filed Oganesyn, et al. v. PayPal, Inc. before the U.S. District Court for the Northern District of California.
Case Background
Affiliate marketing is a powerful and popular tool used by online merchants to promote and sell their products and services. Influencers promote the merchant’s products on their social media platforms on YouTube channels, Instagram or TikTok accounts, or blogs. Merchants pay them commission for the products sold through their promotional efforts.
Influencer commissions are tracked through unique affiliate links provided by online merchants (or third-party affiliate networks who facilitate the process) and posted on the Influencers social media platforms. When a consumer clicks the affiliate link on the Influencer’s platform and arrives on the merchant’s website, the code unique to the Influencer is saved in a cookie on the consumer’s browser. When the consumer completes a purchase, the Influencer’s unique information contained in the cookie is sent to the merchant, identifying the Influencer as the one responsible for the sale. This allows merchants to accurately attribute the sale to the specific Influencer.
In December 2024, MegaLag, a YouTuber known for his tech investigations, exposed PayPal’s Honey scam. The Honey browser extension, which is free for consumers to download and use, is advertised as a tool that helps consumers save by searching for coupons on the internet and applying those coupons to the consumer’s transaction. However, when a consumer clicks on the “Apply Coupon” (or another button) on the Honey pop-up, Honey manipulates the cookie. It deletes the Influencer’s unique information and injects source code with its own information. As a result, when the purchase is complete, it looks like the sale is attributable to Honey, not the Influencer, and the merchant sends the commission that rightly belongs to the Influencer to Honey.