What started as a quiet complaint from affiliate marketers has turned into one of the more uncomfortable startup scandals of the year, and it now involves the daughter of one of the world's most recognisable billionaires. Phia, the AI-powered shopping and price-comparison app co-founded by Phoebe Gates and Sophia Kianni, is facing renewed scrutiny after new reporting suggests its founders knew about a deceptive affiliate practice months before they publicly acknowledged it.
How the Story Began
Phia launched with real momentum: more than $43 million raised, a $185 million valuation, over a million users, and two Forbes-affiliated founders, Kianni was a 2023 Forbes 30 Under 30 honoree, and Gates made Forbes' 2026 Retail & E-Commerce list. The company positioned its browser extension as a smart shopping assistant that finds better deals and prices across retail sites.
But cracks started showing well before this year. In November 2025, Fortune reported that an earlier version of Phia's extension had been transmitting full-page HTML data, including from pages users had visited like banking and email sites, back to Phia's servers. The company said the logging had been anonymous, aggregated, and never stored, and it removed the feature. Researchers, however, said the underlying URL logging still raised legitimate privacy concerns.
The Bigger Problem: Taking Credit for Sales It Didn't Drive
The real trouble came in July 2026, when Bloomberg tested Phia's extension across more than 50 retail sites and found something more serious: the extension was reportedly opening background tabs during checkout and overriding other affiliate referral codes, essentially letting Phia claim commission credit for purchases it had nothing to do with. This kind of behaviour, sometimes called cookie stuffing or attribution hijacking, breaks the terms of most affiliate networks, since it takes commission away from the publishers or creators who actually drove the sale.
Independent researcher Ben Edelman and Capital One Shopping both reported similar patterns. When Bloomberg's findings went public, a Phia spokesperson described it as a bug and said fixes were rolled out within 24 hours; Bloomberg's follow-up testing did find the specific issue resolved. Impact.com, the affiliate network Phia relied on, suspended the company's account pending its own review.
New Reporting Complicates Phia's "Bug" Explanation
That's where things stood until this month. A fresh Bloomberg investigation, based on internal Slack messages and people familiar with the matter, reported that Gates and Kianni were actually aware of the automatic cookie-dropping behaviour as far back as December 2025, roughly seven months before the company publicly framed it as a recently discovered glitch.
According to that reporting, Gates had messaged the engineering team in December confirming that the extension was dropping a cookie every time it popped up, regardless of whether the shopper actually clicked anything. In a separate instance, Kianni reportedly suggested an additional feature that would drop a cookie the moment a user tried to close the pop-up, a suggestion a colleague flagged internally as a violation of Chrome's own policies.
The financial scale involved is significant too. Cookie stuffing is reported to have accounted for roughly half the merchandise value Phia claimed commission credit for in June 2026 alone. When the company disabled the disputed features in July, its average daily revenue reportedly dropped sharply, from around $80,000 a day to somewhere between $10,000 and $28,000.
Where Things Stand Now
As of this month, no formal charge, lawsuit, or regulatory action has been publicly filed against Phia, Gates, or Kianni. Phia has disputed parts of the newer reporting and says it has started reversing improper transactions, though how far that remediation goes will likely depend on how many transactions were actually affected. The company hasn't yet issued a detailed public response addressing the specific claim that its leadership knew about the practice well before it said it did.
For now, the episode has become a cautionary tale about the gap between fast startup growth and the kind of transparency investors, partners, and affiliate networks expect, especially when the company involved carries a famous name.
FAQs
Q1. What is Phia, and who founded it?
Phia is an AI-powered shopping and price-comparison browser extension co-founded by Phoebe Gates and Sophia Kianni.
Q2. What is cookie stuffing, and what did Phia allegedly do?
Cookie stuffing is a deceptive affiliate marketing practice where tracking cookies are dropped without genuine user action, letting a company claim sales credit it didn't actually earn. Bloomberg reported Phia's extension opened background tabs and overrode other referral codes during checkout to do exactly this.
Q3. Did Phia's founders know about the issue before it went public?
According to a newer Bloomberg investigation citing internal Slack messages, Gates and Kianni were reportedly aware of the cookie-dropping behaviour as early as December 2025, months before the company described it publicly as a recently discovered bug.
Q4. Has any legal action been taken against Phia or its founders?
No public charge, lawsuit, or regulatory finding of intentional fraud has been identified as of this reporting.