Exposing Honey's Evil Business Model

PayPal's Lawyer's Cease and Desist [00:02]

• PayPal's legal team sent a cease and desist letter to the creator, requesting the removal of a video over alleged copyright infringement.
• The issue stems from an anonymous source discovering Honey's source code exposed in their iOS app, which was publicly accessible.
• The creator maintains that publishing relevant code sections for security research and public interest is a protected act.
• Despite removing sections of code, the creator anticipates YouTube removing the video and proceeds with publication under duress.

"If PayPal thought this would stop me, they were sorely mistaken."

Allegations of Scamming and Deception [01:02]

• The video introduces skepticism towards Honey, citing excessive advertising and an unclear benefit for users.
• A prediction is made about a future "Great Honey Conspiracy."
• Honey is accused of scamming customers and YouTube creators, described as the "biggest YouTube scam."
• High-profile creators, including the speaker, claim to have been influenced and scammed by Honey.
• Honey allegedly paid influencers upfront while secretly taking money from their back pockets.

"No way. That signs you up for their affiliate link. No way."

Legal Action and User Impact [02:21]

• An investigation for "Mega Lag" is expected to lead to a class-action lawsuit against Honey.
• A class-action lawsuit has been filed on behalf of creators everywhere.
• Gamers Nexus is named as the lead plaintiff in a class-action complaint against PayPal and Honey.
• Since the release of part one, Honey has reportedly lost over 6 million users.
• Google has updated policies for browser extensions, blocking Honey from unearned commissions.

"Since releasing part one of my investigation, Honey has lost over 6 million users."

Business Data Exploitation and Unconsented Store Listings [05:00]

• Honey allegedly injects simulated referral clicks to claim sales commissions, even when no legitimate affiliate link is present.
• A recurring anomaly was observed where Honey did not load its affiliate link, and surprisingly, better deals were found.
• Store owners reported Honey leaking their coupon codes without permission, leading to customer complaints about non-working discounts.
• Businesses discovered Honey was listing their coupon codes, even private ones, and making them public.
• Honey claims to partner with 30,000 stores, but a "supported domains" file within the extension lists over 180,000 online stores.

"Until now, I was so focused on the impact Honey had on consumers and influencers that I didn't even think to consider the potential impact to businesses."

The Spreadsheet of Deception [11:09]

• A developer named Yelta created a program to crawl Honey's database, scraping data for over 180,000 stores.
• This spreadsheet reveals Honey supported 35,000 stores with affiliate links and 146,000 stores without them.
• Honey allegedly lied to consumers about the true number of stores supported.
• The company intentionally hid the real number of stores to avoid revealing their extensive, potentially unconsented, data collection.
• This data collection practice is presented as a core part of Honey's business model since 2015, even before PayPal's acquisition.

"Clearly, Honey decided that keeping this little secret to themselves outweighed the benefits of advertising it."

Strategic Harm to Businesses via Coupon Leaks [13:01]

• Coupon codes are vital marketing tools with strategic purposes, such as customer acquisition through newsletter sign-ups.
• When Honey leaks these codes, businesses lose the intended benefit (e.g., email address) while still offering the discount.
• Private codes, like employee discounts or VIP codes for loyal customers, are also leaked, causing significant financial harm and devaluing the intended purpose.
• Paid services now exist to help e-commerce stores block extensions like Honey due to these issues.
• Honey scrapes codes from users even when they haven't consented, sending the code and savings data to their servers before asking for permission.

"The entire purpose behind that coupon code gets destroyed, stripping away any incentive for the business to continue offering it."

Economic Extortion and Selective Removal [22:24]

• When businesses request removal from Honey's platform, Honey often refuses unless the business partners with them.
• Emails reveal Honey's attempts to solicit partnerships and their refusal to remove stores, citing the need to protect the "Honey experience."
• One business owner, Chip, engaged in a prolonged email exchange with Honey over leaked private codes, with Honey eventually removing the specific code but not the store.
• Another business owner, Andrew, was able to get his store removed, contradicting Honey's claim that they "never have" removed stores.
• This selective enforcement suggests Honey prioritizes stores that generate the most revenue for them.

"Honey's business model starts to make a lot more sense now, doesn't it?"

Data Collection and Monetization [31:04]

• Honey collects extensive data on user shopping habits, order history, and viewed items, leading Amazon to warn users of security risks.
• Despite assurances of not selling data, Honey's privacy policy indicates data sharing.
• A GDPR request revealed Honey systematically tracks browsing activity across online stores, collecting timestamps, user IDs, device information, and geolocation.
• This data allows Honey to infer highly personal insights about users, with over 2,500 pages of activity collected in just three months for one user.
• PayPal's $4 billion acquisition of Honey was likely driven by access to this vast trove of user data for its new advertising network.

"If a product's free, it's likely you're the product."

Targeting Minors and Potential Illegality [39:24]

• Honey's privacy policy states it's for adults 18+, but evidence suggests they knowingly collected and solicited information from minors.
• This practice is potentially illegal in jurisdictions with strict regulations on collecting data from children, requiring parental consent.
• Honey sponsored popular influencers like Mr. Beast, whose audience heavily skews towards minors, garnering billions of views.
• The Mr. Beast ad encouraging children to install the data-tracking extension on all household computers is cited as a severe example of intentional targeting.
• This behavior is attributed to Honey's leadership, not a rogue marketing team, as evidenced by statements from former employees.

"Every kid in America knows what Honey is. Every kid in America was telling their moms and their dads they needed to download, you know, Honey in order to save money."

Affiliate Marketing Malpractice and Non-Compliance [44:40]

• Many other coupon and cashback extensions engage in similar practices, particularly poaching affiliate commissions.
• Extensions like Karma Now and Microsoft's Edge browser have been observed to stealthily replace legitimate affiliate cookies with their own.
• Affiliate networks, which set the rules for the industry, are incentivized to allow these practices because they take a percentage of every commission, thus profiting from fraudulent behavior.
• Honey allegedly developed a secret system to bypass affiliate marketing rules, specifically "standown," which requires extensions to deactivate if a user has already clicked another affiliate link.
• This alleged bypass of rules, supported by a security researcher, is considered potentially criminal behavior, described as "the greatest heist in affiliate history."

"The more you don't stand down, the more you're likely to get caught for not standing down. So, they're trying to figure out in what circumstances can they avoid standing down."