On December 18 last year, Phoebe Gates typed this message in the company's Slack channel: "Can you confirm the auto-popup cookie-stuffing with coupons is live on all sites, so we're monetizing across all GMV?" That message, later obtained by Bloomberg, became the final straw that undid her "self-made" startup narrative.
Phia is a shopping price-comparison browser extension launched by the 23-year-old daughter of Bill Gates, designed to help users find discounts on clothing and accessories, with Phia earning a commission from retailers whenever users make a purchase. Bloomberg first exposed on July 9 this year that Phia secretly opened background tabs to insert its own cookies during checkout, overwriting legitimate referral records in order to claim commissions for sales it didn't actually drive. At the time, a Phia spokesperson called it a "technical glitch," insisting the issue was fixed within 24 hours of Bloomberg's notification.
But the newly exposed internal conversations expose the "technical glitch" excuse for what it really was. An engineer once warned on Slack that the auto-cookie-stuffing approach could "violate compliance requirements," to which co-founder Sophia Kianni replied: "Whatever it takes to keep these cookies stuffing, do it, thank you so much." The timing lines up too—this message, like Gates's question about "monetizing across all GMV," dates back to last December, a full six months before Bloomberg's July report.
Cookie stuffing has a clear definition within the affiliate marketing industry: affiliates are supposed to earn commissions by driving referral traffic, but this technique secretly plants tracking cookies in users' browsers to fabricate referral records and claim commissions. Affiliate marketing expert Ben Edelman put it bluntly to Bloomberg: "Commissions should only be paid when a user actually clicks a link—no fake clicks, simulated clicks, or imagined clicks allowed." This isn't a new type of crime—back in 2008, eBay sued affiliate marketer Shawn Hogan for using the same technique to fraudulently claim roughly $28 million in commissions. Hogan was sentenced to five months in federal prison in 2014.
The numbers reveal just how crucial this scheme was to Phia. After the feature was shut down, Phia's average daily revenue plunged from about $80,000 to somewhere between $10,000 and $28,000; cookie stuffing alone accounted for 51% of all sales Phia claimed credit for in June. Since the report broke, several affiliate partners have already begun cutting ties with Phia.
Corporate attorney Ariel Givner warned on X that Gates could face federal wire fraud charges carrying "up to 20 years in prison, plus fines and restitution." So far, prosecutors have not formally charged Phoebe Gates or Sophia Kianni—the details Bloomberg uncovered remain internal evidence and outside legal interpretation for now, with the case's next steps still to be seen.
