Phia, a high-profile shopping app founded by Bill Gates’ daughter Phoebe Gates and Sophia Kianni, is under scrutiny following accusations of 'cookie stuffing'—a tactic that allowed it to claim affiliate commissions on sales generated through other channels, according to a Bloomberg investigation.
- Phia credited for sales it did not generate through cookie stuffing
- Suspended from Impact.com affiliate marketing platform
- Practice similar to ongoing litigation against PayPal-owned Honey
What happened
Phia, the shopping app startup launched in 2025 by Phoebe Gates and Sophia Kianni, has been accused of engaging in cookie stuffing—a method where the app generated background referral clicks to claim commissions on purchases driven by other affiliates or direct customer visits. According to a Bloomberg investigation supported by reports from an independent consultant and competitor analysis, the Phia extension would open new tabs during a customer’s checkout process, inserting its own affiliate codes and overriding those of other legitimate affiliates.
This deceptive practice allowed Phia to receive credit and commissions on sales it did not actually facilitate. The fallout from these findings led Impact.com, a leading affiliate and influencer marketing platform, to suspend Phia. While Phia has reportedly made fixes after the issue was flagged, questions remain whether these changes will restore trust among retailers and affiliate partners. TechCrunch attempted to contact Phia for comment but has not received a response.
Why it matters
Affiliate marketing relies on accurate tracking of referral sources to ensure commissions are fairly distributed to those who actually drive sales. Cookie stuffing undermines this ecosystem by hijacking credit from legitimate affiliates, potentially costing retailers extra commission payments and eroding trust across the advertising chain. Phia’s alleged behavior highlights risks startups face when attempting rapid growth while navigating industry compliance and ethical boundaries.
The Phia case follows a similar controversy involving Honey, a browser extension owned by PayPal, which remains embroiled in an ongoing class action lawsuit over comparable cookie stuffing allegations. With over $40 million raised and investors like Khloé Kardashian and Hailey Bieber, Phia’s high-profile backing adds public scrutiny and emphasizes the growing importance of transparency and integrity in affiliate marketing for emerging tech companies.
What to watch next
The key developments to monitor include whether Impact.com and associated retailers will reinstate Phia’s affiliate privileges once the company’s claimed fixes are verified. Retailer acceptance is critical for Phia’s continued revenue model, as the company depends on commissions from purchases facilitated through its app and browser extension.
Additionally, regulatory attention or lawsuits in the affiliate marketing space could increase if cookie stuffing practices continue or worsen, especially as industry participants and consumers demand greater transparency. Observers should also watch how other startups and established companies adapt their affiliate marketing practices to avoid similar disputes and preserve trust in digital commerce referrals.