Phia, the shopping startup co-founded by Phoebe Gates and Sophia Kianni, faces renewed scrutiny after new reports reveal the founders knew about their use of cookie stuffing for months prior to public accusations.
- Founders aware of cookie stuffing since December 2025
- Phia stopped practice in July after Bloomberg report
- Company begins transaction reviews and compliance overhaul
What happened
Phia, a shopping startup co-founded by Phoebe Gates and Sophia Kianni, was found to be engaging in cookie stuffing—a method of falsely claiming affiliate commissions by placing tracking cookies on user devices without legitimate referral action. Although the practice is widely banned by affiliate programs because it unfairly diverts revenue, leaked Slack messages and insider sources indicate the founders knew of the strategy as early as December 2025.
Earlier this year, Bloomberg published an investigation revealing Phia’s use of cookie stuffing generated a significant portion of its sales. The company initially described the cookie stuffing issue as a bug, but later disclosures showed it was a deliberately built feature that could be activated or deactivated. Once the practice ceased in July, Phia saw a noticeable drop in daily revenue, highlighting its impact on the business.
Why it matters
Cookie stuffing undermines trust within affiliate marketing ecosystems by illegitimately capturing commissions that should rightfully belong to other marketers or partners. For Phia, the controversy not only jeopardizes relationships with key retail brand partners such as Nike and Nordstrom but also raises serious questions about the startup’s ethical standards and compliance.
The revelation that Gates and Kianni were aware yet allowed cookie stuffing to continue compounds reputational risks and investor concerns, especially as Phia had positioned itself as a transparent platform to help consumers find the best shopping deals. The fallout has already resulted in a substantial workforce reduction and strained brand partnerships, fueling skepticism about the company’s future viability.
What to watch next
Phia has committed to reviewing every transaction and reversing payments linked to cookie stuffing to affected brand partners, signaling efforts to remediate damages. The startup also announced plans to hire a head of compliance to prevent recurrence of such practices and pledged to learn from the incident.
Observers and industry participants will be closely watching how Phia navigates consequences from this episode, including potential legal challenges and impacts on investor confidence. The company’s ability to rebuild trust with retailers and users while demonstrating robust, ethical affiliate marketing will be critical to its ongoing survival and growth.