PayPal unlikely to dodge class action from influencers over lost commissions

SAN JOSE, Calif. (CN) — A federal judge indicated Thursday that a class action against PayPal over a browser extension that overrides affiliate links to take a commission from online purchases was likely to move forward into discovery.

In a consolidated class action, bloggers and influencers bring claims of unjust enrichment, intentional interference with prospective economic advantage and intentional interference of contractual relations against PayPal and its Honey browser extension.

The influencers argued Thursday at a motion to dismiss hearing that Honey overrides their affiliate links, swaps them with its own and redirects commission payments away from creators who brought customers to a merchant’s site. Honey continues to collect referral commissions after consumers chose to opt-out of the extension, the bloggers claim in their second amended complaint filed in January.

The plaintiffs also claim violations of the Computer Fraud and Abuse Act, the California Comprehensive Computer Data Access and Fraud Act, the California Unfair Competition law and a subclass violation of the Washington Consumer Protection Act.

Under the Computer Fraud and Abuse Act, the plaintiffs say two points prove PayPal’s misconduct. First, PayPal transmits Honey without explaining in detail to customers what it does, calling it a “Trojan horse." Second, the extension setup is similar to hacking because it deletes an affiliate’s code and inserts its own, hurting creators who would have otherwise received a commission had their link not been deleted by Honey.

“What is important here is the word ‘permission,’” said plaintiffs’ attorney Jason Lichtman. “How can a consumer give permission to override an affiliate code, which is data housed on that computer, if it had no idea it was doing it?”

U.S. District Judge Beth Labson Freeman told both parties the case “raises many issues,” and said she wanted to see more contracts between the merchants and bloggers to understand the affiliate relationship between the two and what happens when the Honey extension is also in place on an affiliate’s computer.

“I can’t decide whether the permissions are enough for authorization at this stage,” the Barack Obama appointee said. “At some point someone will have to decide it, whether it is me at summary judgment or a jury later.”

Lichtman said millions of customers have already uninstalled the browser because of the plaintiffs’ arguments.

PayPal’s attorney Richard Jacobsen questioned the influencers’ standing, especially after the class shrank from 26 to 11 in the second amended complaint. Furthermore, Jacobsen said, the bloggers didn’t show specific harm beyond one example where a creator already authorized the extension on their device. He said the unjust enrichment claim was the wrong way to the relief the plaintiffs seek, if they are entitled to any.

“They have not plausibly alleged that PayPal diverted any commissions that plaintiffs were actually contractually entitled to receive,” said Jacobsen.

In November 2025, PayPal successfully secured dismissal of the plaintiffs’ first amended complaint. Freeman concluded the influencers’ contracts with the merchants did not entitle them to the commissions Honey is supposedly taking, and that it was not clear their losses are PayPal’s fault rather than that of the “last-click attribution system.”

In Jacobsen’s rebuttal, he said by the plaintiffs’ reasoning, Honey would never be able to swap out links or receive a commission, even when consumers authorize the use of the browser.

Freeman said both parties’ arguments were “very helpful” and the Computer Fraud and Abuse Act claims “are really complicated.”

“I don’t think further amendment is going to be needed,” she said. “I think these claims are either in or out at this point,” saying she would likely need the summer to decide the case.