What Is the PayPal Lawsuit?
The PayPal lawsuit is actually three separate federal class actions, each accusing PayPal Holdings, Inc. and its subsidiaries of different misconduct rather than one single case. The most recently filed is Young v. PayPal, Inc. and PayPal Holdings, Inc., a proposed class action filed January 3, 2025, in the U.S. District Court for the Northern District of California, alleging PayPal's Honey browser extension secretly replaces affiliate marketers' referral cookies with its own at checkout. A second, older case, generally referred to by its lead plaintiff's name Sabol v. PayPal Holdings, Inc., accuses PayPal of using anti-steering merchant rules to keep online transaction fees artificially high since 2019. A third case, In re PayPal Holdings, Inc. Securities Litigation, is a securities fraud class action on behalf of investors who bought PayPal stock while the company allegedly overstated its checkout-growth prospects.
“Through a simple and incredibly effective scheme, PayPal has, for years, been systematically stealing affiliate marketing commissions from individuals who have built businesses, online personas, and advertising relationships to make a living. Plaintiff, individually and on behalf of the other Class members, accordingly files this claim for damages and injunctive relief, seeking an immediate end to PayPal's abusive practices and for recompense for the harm that has been done.”
Source: Young v. PayPal, Inc. and PayPal Holdings, Inc., Case No. 5:25-cv-00124, Class Action Complaint (N.D. Cal., filed Jan. 3, 2025)
Why Are People Filing PayPal Lawsuits?
People are filing PayPal lawsuits for three unrelated reasons, not one shared grievance. Affiliate marketers and content creators are suing because PayPal's Honey extension, purchased for roughly $4 billion in 2020, allegedly swaps in its own tracking cookie at checkout, so PayPal collects a commission that a shopper's original referral link should have earned for the creator who sent that shopper to the store. Consumers are suing separately because PayPal's merchant agreements, which bar merchants from discounting purchases made with cheaper payment methods, allegedly keep online prices higher than they would otherwise be. Investors are suing because they say PayPal talked up its Branded Checkout growth and 2027 financial targets before disclosing weaker results, which they argue inflated PayPal Holdings, Inc. stock in the meantime.
What Injuries Are Included in the PayPal Lawsuit?
The injuries included in the PayPal lawsuit are financial, not physical, and they fall into three distinct categories depending on which case applies. Affiliate marketers describe lost commission income, consumers describe inflated purchase prices, and investors describe trading losses tied to PayPal Holdings, Inc. stock. None of the three currently active cases alleges a physical or medical injury.
Lost Affiliate Commissions
An affiliate commission is the referral fee an online retailer pays a content creator, such as a blogger or influencer, when a shopper completes a purchase through that creator's tracking link.
The Honey lawsuit alleges that when a shopper with the Honey extension installed reaches checkout, Honey replaces the original affiliate marketer's tracking cookie with its own, so the retailer credits PayPal instead of the creator who actually referred the sale. The complaint alleges this happens even when Honey finds no working coupon code for that shopper, meaning the extension's coupon-search function is not what triggers the swap. PayPal's separate PayPal Rewards program is alleged to work the same way at checkout when a shopper activates it.
Inflated Consumer Prices
An anti-steering rule is a merchant contract term that bars a business from offering a discount, or adding a surcharge, based on which payment method a customer chooses to use.
The antitrust case alleges PayPal's merchant agreements prevent retailers from encouraging shoppers to use lower-cost payment options, such as debit transfers or competing platforms, by discounting those methods or surcharging PayPal itself. Consumers argue this shields PayPal from price competition and keeps checkout prices higher across the board, whether or not a given shopper personally uses PayPal.
Investor Losses From Misleading Stock Disclosures
Securities fraud is a legal claim that a company or its executives misled investors about material facts affecting the company's stock price, in violation of federal securities law.
The securities case alleges PayPal and named executives expressed confidence in PayPal's ability to grow its Branded Checkout segment and hit 2027 financial targets, statements investors say were overstated given what PayPal knew internally at the time. Investors who bought PayPal Holdings, Inc. stock during the class period allege they paid an inflated price before PayPal's actual results came in weaker than the earlier statements suggested.
Who Qualifies for the PayPal Lawsuit?
You may qualify if:
- You earned affiliate marketing commissions and had PayPal's Honey extension or PayPal Rewards active on shoppers' browsers at any point since 2020.
- You paid for an online purchase using a payment method other than PayPal, at a merchant that also accepts PayPal, at any point since 2019.
- You bought or sold PayPal Holdings, Inc. common stock (NASDAQ: PYPL) between February 7, 2024, and February 2, 2026.
You may not qualify if:
- Your only connection to PayPal is as a personal PayPal or Venmo account holder, with no affiliate marketing income and no PYPL stock transactions during the relevant dates.
- Your dispute is a single individual customer service issue, such as one held or frozen payment, rather than PayPal's general business practices described in these class actions.
Only a qualified attorney reviewing your specific transaction, merchant, or brokerage records can confirm which, if any, of these three separate class actions you may be eligible to join.
What Is the Current Status of the PayPal Lawsuit?
The current status of the PayPal lawsuit differs by case, since these are three separate proceedings moving on their own timelines in the same federal court rather than one consolidated case. None of the three has been certified as a class yet, and none has reached a settlement.
Young v. PayPal, Inc. and PayPal Holdings, Inc. (Honey Commissions)
Claudia Jayne Young, an Arkansas-based Instagram content creator, filed this proposed class action on behalf of affiliate marketers on January 3, 2025. U.S. District Judge Beth Labson Freeman denied PayPal's motion to dismiss the creators' amended consolidated complaint on June 22, 2026, finding the plaintiffs plausibly alleged concrete injuries, so the case is now proceeding into discovery.
| Court | U.S. District Court, Northern District of California (San Jose Division) |
| Case Number | 5:25-cv-00124 |
| Filed | January 3, 2025 |
| Class Status | Motion to dismiss denied June 22, 2026; proceeding to discovery, not yet certified |
Sabol v. PayPal Holdings, Inc. (Anti-Steering Merchant Fees)
Consumers represented by Hagens Berman Sobol Shapiro and Lockridge Grindal Nauen filed this antitrust class action in 2023, and it has been narrowed but not dismissed with prejudice. Plaintiffs filed a second amended complaint on December 12, 2025, and Judge White held a hearing on PayPal's renewed motion to dismiss on March 27, 2026, taking the matter under advisement without yet issuing a ruling.
| Court | U.S. District Court, Northern District of California |
| Judge Assigned | Hon. Jeffrey S. White |
| Case Type | Proposed federal antitrust class action |
| Class Status | Second amended complaint filed December 12, 2025; motion to dismiss argued March 27, 2026, ruling pending |
In re PayPal Holdings, Inc. Securities Litigation (Investor Claims)
Investors who bought PayPal Holdings, Inc. stock during the class period brought this securities fraud class action, which is proceeding before a different judge than the antitrust case. The court appointed a lead plaintiff and lead counsel on May 21, 2026, after an April 20, 2026 deadline for investors to seek that role.
| Court | U.S. District Court, Northern District of California |
| Judge Assigned | Hon. Jacqueline Scott Corley |
| Class Period | February 7, 2024, through February 2, 2026 |
| Class Status | Lead plaintiff and lead counsel appointed May 21, 2026, not yet certified |
How Much Is the PayPal Class Action Lawsuit Payout?
No settlement amount has been announced in any of the three currently active PayPal cases described on this page.
Because the Honey case, the antitrust fee case, and the securities case have each not reached a certified settlement, no payout amount, minimum award, or per-person estimate actually exists yet for any of them, and a site quoting a specific PayPal lawsuit payout figure for these cases is getting ahead of the real docket.
PayPal has separately paid confirmed regulatory settlements unrelated to these three active cases: $30 million to the U.S. Department of Justice over a discontinued small-business investment program, $2 million to New York's Department of Financial Services over the 2022 data breach, and $6 million to Hawaii's Office of Consumer Protection.
A much older, unrelated class action accusing PayPal of improperly holding customer funds without notice reached a proposed settlement that a California federal judge rejected as insufficient, so even that separate matter has not paid affected account holders.
PayPal Lawsuit Updates
Here are the latest PayPal lawsuit updates, covering new court filings, rulings, and case-count reports as they're confirmed. The PayPal Honey, antitrust, and securities class actions continue in active pretrial proceedings as of September 2026, with no global settlement reached. The timeline below tracks every confirmed development from the first filing forward.
Full PayPal Lawsuit Timeline
FTC Orders PayPal to Stop Misrepresenting Venmo Privacy and Fund Controls
The Federal Trade Commission's Decision and Order, Docket No. C-4651, resolved allegations that PayPal misrepresented how Venmo protected users' financial information and when customers could actually access transferred funds.
PayPal Acquires Honey for Roughly $4 Billion
PayPal bought the Honey Science Corporation browser extension for approximately $4 billion in November 2020, the deal now at the center of the affiliate-commission allegations filed five years later.
A Credential-Stuffing Attack Exposes Roughly 35,000 PayPal Accounts
Attackers used username-and-password pairs leaked from other websites to access roughly 35,000 PayPal customer accounts in December 2022, an incident that later drew both a lawsuit and a state regulatory settlement.
Consumers Sue PayPal Over 'Industry-High' Transaction Fees
A federal antitrust class action accused PayPal of using anti-steering merchant rules to keep online transaction fees artificially high, a case later assigned to Judge Jeffrey S. White in the Northern District of California.
Claudia Jayne Young Files the Honey Commission-Theft Class Action
Plaintiff Claudia Jayne Young filed Young v. PayPal, Inc. and PayPal Holdings, Inc., Case No. 5:25-cv-00124, alleging PayPal's Honey extension replaces affiliate marketers' tracking cookies with its own at checkout.
New York Regulator Fines PayPal $2 Million Over the 2022 Breach
New York's Department of Financial Services ordered PayPal to pay $2 million for failing to comply with state cybersecurity regulations connected to the December 2022 data breach.
A Federal Judge Narrows the PayPal Antitrust Fee Case
PayPal won dismissal of the operative consumer complaint over transaction fees in November 2025, though the presiding judge gave the plaintiffs a further opportunity to file an amended complaint rather than closing the case outright.
Sabol Plaintiffs File a Second Amended Antitrust Complaint
Plaintiffs in the PayPal anti-steering antitrust case filed a second amended complaint on December 12, 2025, after Judge Jeffrey S. White's November 2025 dismissal gave them a final opportunity to plead market power and antitrust injury.
The PayPal Investor Class Period Closes
The securities fraud class action's class period ran from February 7, 2024, through February 2, 2026, covering investors who bought PayPal Holdings, Inc. stock while the company allegedly overstated its Branded Checkout growth outlook.
Judge White Hears PayPal's Renewed Motion to Dismiss the Antitrust Case
Judge Jeffrey S. White held a hearing on March 27, 2026 on PayPal's motion to dismiss the Sabol plaintiffs' second amended complaint and took the matter under advisement without ruling from the bench.
PayPal Settles a DOJ Fair-Lending Investigation for $30 Million
The Justice Department announced a $30 million settlement with PayPal resolving a fair-lending investigation into a 2020 small-business investment program the government said improperly excluded applicants based on race and national origin.
Court Appoints Lead Plaintiff in PayPal Securities Case
Judge Jacqueline Scott Corley appointed a lead plaintiff and lead counsel in the PayPal securities fraud class action on May 21, 2026, following an April 20, 2026 deadline for investors to seek the lead plaintiff role.
Court Dismisses a Separate UK Shopper Honey Lawsuit With Prejudice
A California federal court dismissed Campbell v. Honey Sci, LLC, a proposed class action brought on behalf of roughly 6.8 million UK residents, with prejudice on June 15, 2026. That case alleged Honey withheld better deals from shoppers and is legally distinct from the Young v. PayPal creator-commission case on this page.
Judge Freeman Denies PayPal's Motion to Dismiss the Honey Creator Case
U.S. District Judge Beth Labson Freeman denied PayPal's motion to dismiss the creators' second amended consolidated complaint on June 22, 2026, finding the plaintiffs plausibly alleged concrete injuries and letting every claim proceed into discovery.
How to File a PayPal Lawsuit
Filing a PayPal lawsuit typically follows the 5 steps below.
- Identify which PayPal case applies to you: Determine whether your situation involves lost affiliate commissions, higher checkout fees paid instead of PayPal, or PayPal stock losses, since each proceeding has its own eligibility rules and its own attorneys.
- Gather your records: Save affiliate program statements, PayPal or Venmo transaction history, merchant checkout receipts, or brokerage statements showing PayPal stock purchases and sales during the relevant dates.
- Consult a class action or securities attorney: A lawyer who already handles the specific type of claim you have can confirm your eligibility and any deadline that applies in your state or through your brokerage.
- Submit an intake form or contact existing counsel: Several of the law firms already litigating these cases accept new plaintiffs or witnesses through a free case review before any class is formally certified.
- Watch for a certified class or settlement notice: If any of these cases is certified or settles, class members are typically notified by mail or email and given a claim form with its own filing deadline.
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What Proof Do You Need for a PayPal Lawsuit Claim?
The proof you need for a PayPal lawsuit claim depends entirely on which of the three cases applies to you, and each one requires documented records rather than a personal account of what happened. An affiliate marketer needs affiliate program dashboards or payout statements showing expected commissions that did not arrive. A consumer needs receipts or card statements showing online purchases made at merchants that accept PayPal, during the period the anti-steering rules were allegedly in effect. An investor needs brokerage statements showing PayPal Holdings, Inc. stock purchased and sold within the February 2024 through February 2026 class period. In every case, a screenshot alone is generally weaker evidence than an official statement or export from the platform itself, since it can be edited and an attorney will want a verifiable source.
What Did the PayPal Lawsuit Defendant Allegedly Know?
PayPal Holdings, Inc. has not been found liable in any of the three currently active cases described on this page, and it has not admitted wrongdoing in any of them. Separately, PayPal has repeatedly settled, rather than fully litigated, other consumer-protection and disclosure allegations with regulators, which is documented history a reader can weigh even though none of it is the same case as the Honey, antitrust, or securities litigation above.
| Regulator | Year | Resolution |
|---|---|---|
| Federal Trade Commission | 2018 | Decision and Order, Docket No. C-4651, over Venmo privacy and fund-access misrepresentations |
| U.S. Department of Justice | 2025 | $30 million fair-lending settlement over a discontinued small-business investment program |
| New York State Dept. of Financial Services | 2025 | $2 million cybersecurity settlement tied to the December 2022 data breach |
| Hawaii Office of Consumer Protection | 2025 | $6 million consumer protection settlement |
None of these four regulatory resolutions is the same case as the Honey, antitrust, or securities litigation described above, but together they show PayPal has a recent pattern of settling consumer-protection and disclosure allegations rather than litigating them to a final court ruling.
How Does the PayPal Lawsuit Compare to Related Cases?
The PayPal lawsuits compared on this page are separate from a couple of older, related cases that share the same defendant but involve different facts. An earlier class action accused PayPal, at the time still closely tied to former parent company eBay, of placing holds on customer accounts without adequate notice or explanation. A California federal judge rejected the parties' proposed settlement in that case as insufficient, so it remains unresolved and distinct from the Honey, antitrust, and current securities cases described above. Separately, an earlier PayPal securities class action covering a 2021 through 2022 trading period was litigated in the same court, reached the point of appointing liaison counsel, and is no longer accepting new plaintiffs, which makes it a different, closed intake window from the 2024 through 2026 class period case above.
Frequently Asked Questions
Is the PayPal lawsuit a class action?
Yes. All three of the currently active PayPal cases described on this page, the Honey commission case, the antitrust fee case, and the securities case, were filed as proposed class actions, though none of them has been certified by a court yet.
What is the PayPal Honey lawsuit about?
The PayPal Honey lawsuit is a proposed class action, Young v. PayPal, Inc. and PayPal Holdings, Inc., alleging PayPal's Honey browser extension replaces affiliate marketers' referral cookies with its own at checkout, diverting sales commissions to PayPal instead of the marketer who generated the sale.
Did PayPal win the antitrust lawsuit over transaction fees?
PayPal won dismissal of the operative complaint in the antitrust fee case in November 2025, but the presiding judge gave the plaintiffs a further opportunity to amend rather than ending the case outright, so it remains open as of this writing.
Can I still join the PayPal securities lawsuit?
It depends on when you bought PayPal stock. The current securities class action covers investors who bought PayPal Holdings, Inc. common stock between February 7, 2024, and February 2, 2026, while a separate, earlier securities case already covered an unrelated 2021 through 2022 trading period and is no longer taking new plaintiffs.
How much is the PayPal class action lawsuit payout?
No payout amount exists yet in any of the three active PayPal cases, since none has reached a certified settlement, and a much older PayPal held-funds class action's proposed settlement was rejected by a federal judge as insufficient.
Is the PayPal data breach lawsuit the same as the Honey lawsuit?
No, the PayPal data breach lawsuit is a separate, distinct matter concerning a December 2022 credential-stuffing attack that exposed roughly 35,000 accounts, resolved through a $2 million New York regulatory settlement rather than the Honey commission litigation.