The Fallout from the Honey Scandal: 7 Million Users Lost, Lawsuits, and Industry Reckoning

• Affiliate link hijacking (last-click overwriting): When a user with Honey installed visited a store, the extension replaced the original creator's affiliate tracking cookie with its own at checkout, even when no coupon was applied. This diverted commissions from creators who had referred the sale .
• Hidden tab injection: Honey opened invisible browser tabs in the background to simulate its own referral at the moment of purchase, ensuring it received credit as the last-click referrer .
• Coupon suppression: The extension deliberately hid better coupon codes from users and prioritized lesser deals that benefited Honey's own merchant partnerships, defeating its stated purpose of finding the best savings .

The original video garnered over 13 million views within days and triggered widespread backlash .

PayPal's Legal Response

In December 2024, PayPal's lawyers sent MegaLag a cease-and-desist letter warning that his investigation was "defamatory" and insisting Honey's business practices were "legal and responsible" . When MegaLag released an early version of Part 2 on Patreon before publishing it on YouTube, PayPal acted through Patreon to have the early upload taken down .

Part 2 — "Exposing Honey's Evil Business Model" (December 2025)

On December 22, 2025, nearly a year after the first video, MegaLag released a 51-minute second investigation. It revealed :

• Honey maintained a database of private, single-use coupon codes and systematically scraped them from individual shoppers, depriving them of exclusive discounts .
• The extension engaged in extreme data harvesting and practices that deliberately harmed small businesses .
• The second video directly spurred a class-action lawsuit led by YouTuber LegalEagle (Devin Stone) alongside several other creators, filed against PayPal in federal court .

Affiliate Network Removals (January 2026)

Within weeks of the original exposé and following compliance investigations, three major affiliate networks took action :

• Rakuten Advertising terminated Honey from its network effective January 12, 2026, cutting off access to approximately 2,000 retail merchants including Walmart, Lego, Sephora, Newegg, Uniqlo, and Samsung .
• Impact.com removed Honey from its Discovery Marketplace and temporarily suspended its account on January 16, 2026, following a thorough investigation that determined Honey violated platform policies regarding attribution practices and compliance testing .
• Awin Group confirmed after its own formal investigation that Honey had violated its publisher policies, suspending payments while blocking new program access .

Part 3 — "Honey Gets Terminated as Lawsuits Proceed" (August 11, 2026)

MegaLag released his third video on August 11, 2026, documenting the cumulative damage :

User and Merchant Losses as of August 2026

• Chrome users: Honey lost more than 7 million Chrome users since December 2024 .
• Merchant partners: Approximately 7,000 merchant partners dropped Honey, reducing its merchant roster from around 35,000 in December 2024 to just over 28,000 — roughly one-fifth of its partnerships .

Judge Beth Labson Freeman's June 2026 Ruling

On June 22, 2026, U.S. District Judge Beth Labson Freeman in the Northern District of California declined to dismiss any part of the content creators' consolidated class action, sending the case into full discovery . The lawsuit (Oganesyn, et al. v. PayPal, Inc., Case No. 4:25-cv-00518) had survived PayPal's motion to dismiss in its entirety — a major procedural win for the plaintiffs .

PayPal's Defense

PayPal's primary public defense has been that the affiliate re-attribution code in question predated its acquisition of Honey (which it bought for $4 billion in 2020) and that the practice affected under 0.1% of transaction traffic . However, this argument has not prevented legal or network consequences.

Google's Chrome Web Store Policy Update

In response to the controversy, Google updated its Chrome Web Store policies to require that extensions engaged in affiliate re-attribution must clearly disclose this practice to users . This policy change directly targeted the type of hidden last-click overwriting that Honey had allegedly employed .

Rakuten's Safeguard Against Last-Click Overwriting

Rakuten Advertising, after terminating Honey from its network, implemented new safeguards designed to prevent any publisher from overwriting existing affiliate tracking attribution at checkout — a direct response to Honey's alleged technique of last-click hijacking .

Warnings from Prominent Creators

Several prominent YouTubers who had previously been sponsored by Honey — including Markiplier and others — publicly distanced themselves from the brand and warned their audiences . MegaLag's third video documents how many top creators, having been paid millions by Honey for promotions, later apologized and removed old sponsorship content after the practices were exposed .