Google cracks down on Chrome extensions following Honey scandal

Late last year, a YouTube video uncovering the shady affiliate tactics of PayPal's coupon Chrome extension, Honey, went viral.

The 23-minute video by YouTube creator MegaLag received more than 17 million views and spurred lawsuits against PayPal from YouTubers like Legal Eagle and GamersNexus.

As a result of the Honey expose, Google has now changed its Chrome extension policies concerning affiliate ads and marketing.

What is Honey?

First, as a refresher, Honey is a Chrome extension from PayPal that alerts users when it detects a coupon code relevant to their current e-commerce shopping cart. In exchange for providing the user with this coupon code, Honey enables PayPal's affiliate link on the user's computer so that PayPal receives credit for the customer's purchase. PayPal receives monetary compensation for every purchase made through their affiliate link from the e-commerce store.

However, it appears that many Honey users were unaware of how the Chrome extension worked. MegaLag's video also highlighted that Honey inserted its affiliate link even if it had not discovered a relevant active coupon code. In addition, Honey would also replace an existing affiliate link, or where the shopper's purchase actually originated from, with its own in order to be credited for the sale.

While Honey users were incensed over Honey's affiliate link tactics, the move actually hurt content creators. YouTubers and other creators often recommend products, and their fans make their purchase through the creator's affiliate link to help support them. Affiliate sales can often make up a substantial portion of a creator's revenue. Honey was essentially stealing those sales from creators.

Google Chrome's new extension policies

Honey's tactics resulted in Google rolling out brand new affiliate ads policies for Chrome extensions.

According to the new policy, which is available on the Chrome for Developers website, "Affiliate links, codes, or cookies must only be included when the extension provides a direct and transparent user benefit related to the extension's core functionality. It is not permitted to inject affiliate links without related user action and without providing a tangible benefit to users."

To make it absolutely clear, Google even provided some examples that would be in violation of this policy, such as inserting an affiliate link when no coupon, cashback, or other discount is provided. In addition, Google says a user must take action for an extension to inject an affiliate code. The extension can't just insert the affiliate code without being manually prompted to do so by the user.

"Related user action is required before the inclusion of each affiliate code, link, or cookie," reads the next section of the policy.

This section clearly states that a Chrome extension must notify the user if it is replacing an existing affiliate link with its own. Any Chrome extension replacing an affiliate link without a user's knowledge violates Google's policies.

Looking through the policy, it appears to be a pretty targeted response to Honey's affiliate tactics. It also doesn't appear to affect the legitimate utility that Honey and other coupon — and cashback-related Chrome extensions — provide users.