Phoebe Gates' shopping startup, Phia, has been accused by Bloomberg of using "cookie stuffing" to claim affiliate commissions on purchases it did not generate
Phia helps users compare prices and find discount codes, and has raised over $43 million from leading venture capital firms and celebrity investors
While Phia says it has fixed the issue, the controversy has raised concerns about trust and compliance in the affiliate marketing ecosystem
Phoebe Gates, 23, is the youngest daughter of Microsoft co-founder Bill Gates and philanthropist Melinda French Gates. While she first came into the public eye because of her family, she has increasingly built an independent profile as an entrepreneur and investor.
A graduate of Stanford University, Gates has focused on technology and consumer businesses rather than joining the family foundation or Microsoft.
Along with climate activist Sophia Kianni, she co-founded Phia in 2025, a shopping technology startup designed to help consumers compare prices, discover second-hand alternatives and automatically apply discount codes while shopping online.
1 June 2026
Get the latest issue of Outlook Business
The startup has raised about $43.5 million from investors, including Notable Capital, Kleiner Perkins and Khosla Ventures, alongside celebrity backers such as Sydney Sweeney, Khloé Kardashian, Hailey Bieber and former Meta executive Sheryl Sandberg, as per Bloomberg (BBG).
What Does Phia Do?
Phia operates as a browser extension and shopping assistant that searches for better prices and promotional codes across multiple retailers.
Like many shopping extensions, it earns commissions through affiliate marketing whenever it is credited with directing a customer to complete a purchase, as per Bloomberg.
The company has promoted its focus on user privacy. In an interview with TechCrunch earlier this year, co-founder Sophia Kianni said that the company wants to make sure all data is aggregated, anonymous and only used for the purpose of being able to help users find the best products as efficiently as possible.
Why Has The Startup Come Under Scrutiny?
According to Bloomberg, independent testing of Phia's browser extension, supported by affiliate marketing researcher Ben Edelman and competing browser extension Capital One Shopping, found that the software inserted its own affiliate referral code during checkout without any action from users.
The investigation alleged that this practice, commonly referred to as "cookie stuffing", allowed Phia to claim commissions even when another publisher, advertisement or affiliate had originally directed shoppers to a retailer's website.
The extension silently opened a background browser tab on numerous retail websites before replacing existing referral codes with its own. The BBG report said it observed this behaviour across more than 50 online retailers and several major affiliate networks.
"The most fundamental requirement in affiliate marketing is that commission is only paid if a user clicks," Edelman said, as per the report.
"The rules don’t allow fake clicks, simulated clicks, imaginary clicks or hypothetical clicks. Only a real click will do," he added.
The allegations mirror previous legal disputes involving other shopping extensions, including Honey, which continues to face an ongoing class-action lawsuit over similar claims, as per a report by TechCrunch.
Company's Response And What Lies Ahead
Phia acknowledged the issue after it was notified of the findings and said the problem had already been fixed, as per BBG.
"Within the last 24 hours, we were made aware that in a recent release our codebase was causing misattributions from a subset of users," a company spokesperson was quoted as saying by BBG.
The spokesperson added, "As soon as we were notified, our team worked overnight to identify, mitigate, and has since resolved the issue."
Subsequent testing found that the extension had stopped automatically claiming referral clicks in the cases it previously observed, the BBG report said.
The controversy has nevertheless had immediate consequences. According to Bloomberg, affiliate platform Impact.com suspended Phia's account after identifying behaviour that was inconsistent with its platform policies and said it is reviewing affected transactions to determine whether corrective action is required.
Although the company said the technical issue has been resolved, the investigation has raised questions about trust, affiliate marketing practices and governance at one of the highest-profile consumer startups launched by a new generation of technology entrepreneurs.
