For affiliate marketers, this one’s personal.
A federal court in California just shut down PayPal’s attempt to push a class action lawsuit into private arbitration. That might sound procedural, but for bloggers, podcasters, and influencers who rely on affiliate commissions, it’s a big deal. It means their claims—centered on alleged commission theft via the Honey browser extension—will be heard in open court, not behind closed doors.
Let’s unpack why that matters.
The Arbitration Argument That Didn’t Stick
PayPal tried to argue that the plaintiffs had agreed to settle disputes through arbitration when they signed up for PayPal or Venmo. You know those long user agreements most people skim? They often include clauses that say you can’t sue—you have to arbitrate.
But the court wasn’t convinced.
The judge ruled that those agreements only cover issues related to using PayPal or Venmo accounts. They don’t stretch to broader business practices, like what Honey allegedly did with affiliate links. In short, the plaintiffs never agreed to arbitrate this kind of dispute. So, the motion was denied.
That’s not just a legal technicality. It’s a door swinging open.
The Heart of the Lawsuit: Cookie Hijacking
At the center of the storm is Honey, the coupon-finding browser extension PayPal acquired in 2020. The lawsuit claims Honey has been quietly hijacking affiliate commissions. How? By swapping out the original affiliate’s tracking cookie with its own—right at the point of sale.
Picture this: a consumer clicks a link from a content creator, lands on a product page, and then activates Honey to check for coupons. Boom. Honey’s cookie takes over. It looks like Honey made the referral, and the commission goes to PayPal.
If that’s true, it’s not just sneaky—it’s costly. For creators who depend on last-click attribution to earn income, it’s a gut punch.
Why This Ruling Matters
This decision doesn’t resolve the case. But it does set the stage for a public fight. Instead of being forced into isolated arbitration battles, creators can challenge PayPal together, as a class.
And that’s powerful.
It signals that the court sees these commission claims as distinct from everyday user account issues. It also suggests that tech giants can’t always hide behind boilerplate agreements when their business practices are called into question.
So, what’s next? The lawsuit moves forward. And affiliate marketers everywhere will be watching.
Have you ever lost a commission you thought you earned? Drop a comment below—we’d love to hear your story. And don’t forget to follow us on Facebook, Twitter, and Pinterest for more updates on affiliate marketing news and tips.
Before you go, learn how to maximize holiday sales with YouTube Shopping Affiliates.
Sources
- www.ppc.land/paypal-fails-to-compel-arbitration-in-honey-affiliate-commission-lawsuit/
- www.law.justia.com/cases/federal/district-courts/california/candce/5:2024cv09470/441974/232/
- www.topclassactions.com/lawsuit-settlements/lawsuit-news/paypal-honey-steal-influencer-marketing-commissions-class-action-claims/
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