Billionaire daughter Phoebe Gates faces fallout over alleged shopping app scheme

### Phoebe Gates’ Phia Faces Scrutiny Over Alleged Affiliate Marketing Practices

Phoebe Gates, daughter of Microsoft co-founder Bill Gates, is facing growing scrutiny over allegations surrounding Phia, the AI-powered shopping startup she co-founded with Sophia Kianni. Phia was designed as a shopping assistant and browser extension that helps users find discounts and promotional codes while shopping online. The startup has come under investigation following allegations that its software used a practice known as “cookie stuffing” to claim affiliate commissions. Cookie stuffing generally involves placing tracking cookies in a user’s browser without a legitimate referral taking place. Such tracking can allow a company to receive credit for purchases generated through other publishers, creators or deal websites. Independent technical investigations and internal company records have reportedly raised questions about whether Phia’s software automatically placed tracking cookies during online checkout processes. The company initially described the activity as an unintended technical issue within its codebase. Representatives said the problem was identified after reports emerged in July and that engineers addressed it quickly. However, reports based on internal communications have raised questions about how much company leadership knew about the feature. According to reported internal messages, executives discussed automated cookie placement and whether it was active across merchant websites. One message attributed to Phoebe Gates reportedly questioned whether the automated feature was enabled across coupon-supported sites to ensure the company was monetizing transactions. The allegations have intensified concerns about how Phia generated revenue through affiliate marketing partnerships. Internal data reportedly indicated that automated tracking contributed significantly to the startup’s earnings. After the feature was disabled on July 7, Phia’s average daily revenue reportedly declined from around $80,000 to between $10,000 and $28,000. Data from June reportedly showed that the disputed activity represented about 51% of the merchandise value claimed by the company. The controversy has already affected Phia’s relationships with affiliate networks and major retailers. Affiliate platform Impact.com suspended Phia while it conducts an audit of transactions associated with the startup. Several major retailers, including Nike and Nordstrom, were reportedly among the merchants affected by the disputed attribution practices. The allegations also raise potential legal questions because affiliate commissions can involve significant financial transactions across multiple states and companies. Legal commentators have suggested that deliberate misappropriation of referral credit could potentially create exposure under federal fraud laws, although any criminal liability would depend on the facts and applicable law. Phia has maintained that the problematic features have been removed from its technology. The company also said it is working on transaction reversals for affected brand partners and has begun strengthening its compliance operations. The startup is reportedly hiring a dedicated compliance executive as it responds to the controversy. Phia representatives have also disputed aspects of the revenue analysis, arguing that the decline following the July changes reflected a broader pause in monetization activities rather than solely the removal of the disputed feature. The controversy highlights the growing risks faced by AI-powered shopping tools that operate directly inside users’ browsers. While such extensions can provide consumers with discounts and convenience, they can also interact with affiliate tracking systems that determine which company receives credit for a sale. The Phia case has therefore drawn attention to transparency, affiliate attribution and consent in the rapidly expanding digital commerce ecosystem. As affiliate networks and retailers review the transactions in question, Phia faces the challenge of rebuilding trust with commercial partners. The investigation could also have broader implications for browser extensions and automated shopping platforms that rely heavily on affiliate commissions. For now, the startup’s response, transaction reviews and any further findings from affiliate networks will determine how seriously the allegations affect Phia’s business and reputation.