Co-founders Phoebe Gates and Sophia Kianni were aware their shopping startup Phia was engaging in cookie stuffing as early as December, according to new reporting from Bloomberg published this week. The revelation contradicts the company's earlier statement that it only learned of the issue when Bloomberg first contacted them. Cookie stuffing — claiming credit and commission for affiliate purchases the company didn't actually facilitate — made up a substantial portion of Phia's sales, and the startup saw a significant decline in daily revenue after halting the practice.
Leaked Slack messages and sources familiar with the matter reveal that Gates and Kianni discussed cookie stuffing methods with other executives and engineers months before the practice became public. The Bloomberg investigation identified affected retailers including Nike and Nordstrom. Following the initial July report, a Phia spokesperson characterized the cookie stuffing as a bug, but Bloomberg now reports the feature was deliberately engineered and could be toggled on and off. The company removed the features causing misattributions on July 7, more than a month ago.
According to a Phia spokesperson's statement to TechCrunch, the company is "reviewing every transaction" and has "already begun issuing all transaction reversals to brand partners as a result of any misattribution." The spokesperson added that Phia is "hiring a head of compliance to make sure something like this never happens again." Bloomberg reports that Phia disputed some of the publication's claims but acknowledged it would "learn from this" incident.
Cookie stuffing is considered controversial in the affiliate marketing industry primarily because it diverts referral revenue from legitimate affiliate marketers who actually drove customer purchases. When affiliate platforms like Phia join marketplaces, they typically sign contracts explicitly prohibiting cookie stuffing due to its unfair nature. The practice allows a company to claim commission on sales it played no role in generating, effectively siphoning payments that would otherwise go to marketers who genuinely influenced the transaction. Phia launched in April 2025 with the goal of creating a Google Flights-style comparison tool for shopping that would help users locate the best prices across multiple retailers.
The cookie stuffing scandal adds to mounting troubles for the startup. Reporting from Puck in July found that Phia lost nearly half its full-time staff since the start of the year, that multiple brands were unaware they were featured on the app, and that investors were put off by how heavily Phia relied on affiliate marketing. The company has also faced criticism for secretly gathering large amounts of sensitive data, including monitoring user activity across the web and transmitting it to company servers. Whether Phia can rebuild trust with retail partners, investors, and users remains uncertain after these repeated controversies. The appointment of a compliance head and transaction reversals signal an attempt at accountability, but the pattern of problematic practices raises questions about the startup's long-term viability in an industry built on trust and transparent commission structures.