Amazon recently began presenting a security warning to consumers using Honey, a browser extension that finds and applies discounts to consumer products, and which is operated by a firm that was recently acquired by PayPal for $4 billion, Wired reports.

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The message appears at the top of Amazon's webpage and informs consumers that Honey tracks their behavior and collects their data, and it provided a link that would inform consumers how to uninstall it.

The warning started appearing on December 20, even though consumers have been using Honey to aid in shopping with Amazon for many years. Honey doesn't seem to collect any consumer data without requesting to do so, per Wired, but it did temporarily disable some features like price tracking so the message would stop appearing.

While Amazon may have legitimate concerns about Honey's operations, it might also be strategically attempting to damage Honey's reputation now that it's owned by PayPal. By bringing in Honey, PayPal has the opportunity to become a bigger player in commerce because the extension can help it expand beyond payments.

Because of this, Amazon may see the combined entity as a threat to deal with. And by causing Honey's users to see a security warning whenever they shop on Amazon's immensely popular marketplace, Amazon could cause hesitation among Honey users and ultimately limit its value to PayPal.

There are two Honey capabilities that, combined with PayPal, likely threaten Amazon the most:

  • Honey's product discovery tools could make PayPal a threat to Amazon's hold on the shopping process, from start to finish. Honey offers price-tracking services that can notify a consumer when a product's price drops and has a mobile app that features millions of products from hundreds of merchants. Combining such product discovery offerings with PayPal's payments capabilities could make PayPal a formidable player in commerce, as consumers could begin their search with Honey before checking out via PayPal. Currently, Amazon dominates the product search process — 74% of US Amazon shoppers use the site to shop for specific products, while 66% do the same when looking for new products — and it leads the US e-commerce market in sales. It's likely wary of PayPal growing its capabilities throughout the purchase funnel in a way that could threaten its grip.
  • The acquisition should bolster PayPal's ability to capture shopping data, including on Amazon's marketplace. Honey's operations allow it to see what consumers are shopping for, which can provide insights that PayPal could use to bolster its operations. And when consumers use Honey's extension on Amazon's site, Honey should be collecting the same data it does on other sites. That could give PayPal useful insight into how consumers shop on Amazon — information that Amazon would likely prefer to be the sole holder of.

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