Phia's 'cookie stuffing' scandal: Gates and Kianni knew for months
Shopping startup Phia faces allegations of deceiving brands and marketplaces through commission fraud.
1Phia's controversial practice
Shopping startup Phia, founded by Phoebe Gates and Sophia Kianni, is under fire for allegedly earning unfair commissions through 'cookie stuffing'. Bloomberg reports the company claimed commissions even for purchases made outside affiliate marketplaces. This practice is considered an unethical and banned method in the industry.
2Executives' knowledge
New Bloomberg reporting reveals Gates and Kianni knew about the cookie stuffing as early as December 2025. Internal Slack messages show executives discussing and working with engineers on the practice. Phia representatives had previously described it as a 'software bug' in July.
3Impact on brands
Nike and Nordstrom were among the brands most affected by the scandal. Cookie stuffing reportedly accounted for a significant portion of Phia's daily revenue, with substantial drops occurring after the practice was stopped.
4Company's defense
A Phia spokesperson denied some of Bloomberg's claims while stating the company would 'learn from this'. They claimed faulty features were removed on July 7, repayments were being made to brand partners, and a compliance officer would be hired. The company maintains all transactions are being reviewed.
5Employee and investor loss
According to Puck's July report, Phia has lost nearly half its full-time employees since the beginning of the year. Some brands were unaware they were listed on the app, while investors grew wary of the company's aggressive focus on affiliate marketing.
6Past controversies
Phia previously faced scrutiny for allegedly tracking users' web behavior to collect sensitive data. Launched in April 2025 as a Google Flights-like shopping platform, the company had successfully attracted users with its 'best price finding' promise.
7Industry repercussions
Cookie stuffing poses a serious threat to affiliate marketers, as it unjustly diverts earnings from other marketplaces. The practice often leads to legal action and is typically explicitly prohibited in industry contracts.
8Ethical and legal consequences
The Phia scandal serves as a stark example of how growth ambitions can push startups to ethical boundaries. Beyond reputational damage, the company's relationships with brand partners have suffered significantly. Measures like hiring a compliance officer signal increased industry scrutiny ahead.