Full Breakdown
Phoebe Gates’ Phia App Accused of Cookie-Stuffing Scheme
8/13/2026, 1:58:23 AM
Core Event: Alleged Cookie-Stuffing and Legal Exposure
Phia, an AI-powered personal-shopping browser extension co-founded by Phoebe Gates and Sophia Kianni, has been accused of “cookie stuffing”—claiming affiliate commissions on sales the extension did not actually drive. Bloomberg’s July 9 investigation found Phia’s code opened background tabs and injected its own referral cookie during checkout, overriding legitimate affiliate links. Internal Slack messages obtained by Bloomberg show Gates asking on December 18 to confirm that an “auto pop for cookie drop” was live on all sites, and Kianni replying that the feature could be “against compliance.”
Background & Context
Phia markets itself as a digital personal-shopping assistant that surfaces discount codes and price-comparison data. The extension earns commissions when a shopper clicks a Phia-provided coupon link. The startup raised $35.5 million in seed funding on May 29, led by Notable Capital, Khosla Ventures and Kleiner Perkins, and later accumulated more than $43 million in total financing, attracting celebrity investors such as Hailey Bieber and Kris Jenner. Affiliate-marketing expert Ben Edelman noted that legitimate commissions require a genuine user click; simulated clicks are prohibited. A 2008 eBay lawsuit against affiliate Shawn Hogan, who received a five-month prison sentence for a similar scheme, provides a legal precedent.
Data & Statistics
- Average daily revenue fell from roughly $80,000 to $10,000–$28,000 after the issue was disclosed.
- In June, ? 51 % of the merchandise value Phia claimed credit for stemmed from the disputed cookie-dropping behavior.
- Phia reports over 9,600 retail brand partners and a user base that later surpassed one million.
- The company’s valuation reached about $185 million after a January 2026 Series A round of $35 million.
Official Statements & Responses
A Phia spokesperson said the company became aware of the misattribution “within the last 24 hours” and removed the offending feature on July 7. The spokesperson added that the team worked overnight to identify and mitigate the problem, is reviewing every transaction, and is hiring a head of compliance to prevent recurrence. Impact.com, a major affiliate-marketing platform, suspended Phia’s account pending further review.
Verbatim Quotes
- “Whatever we can do to keep these cookies dropping will be amazing thank you,” — Sophia Kianni, co-founder
- “It’s typically treated as federal wire fraud in US courts. There’s a possibility of a max penalty of up to 20 years prison + fines/restitution,” — Ariel Givner, corporate attorney
What’s Next
The matter remains under investigation by affiliate platforms and could attract civil or criminal action. Phia’s compliance overhaul and the outcome of Impact.com’s review will determine whether the startup can retain partners and investors.
