Phia Startup Leadership Entangled in Affiliate Marketing Scandal

Phia, the shopping startup founded by Phoebe Gates and Sophia Kianni, has faced another serious scandal. According to Bloomberg, the company’s executives knew about the “cookie stuffing” practice, which generated commissions for purchases made on their shopping platform without customer involvement, but did not disclose it publicly for months. This was reported by TechCrunch.com reported reported.

In fact, “cookie stuffing” is considered a highly controversial and widely condemned practice in internet marketing. Platforms typically sign specific agreements not to use this method when entering the market because it involves unfairly taking revenue from other partners. According to Bloomberg, Phia representatives initially claimed they learned about the issue only when journalists began investigating it.

Leaked Communications and Financial Fallout

However, according to new information published by Bloomberg based on leaked Slack messages obtained by the outlet and sources familiar with the situation, Phoebe Gates and Sophia Kianni knew their startup was using the method as early as December last year. The leaked communications clearly show that the founders discussed the matter with the company’s executives and engineers.

According to the investigation, “cookie stuffing” accounted for a significant share of Phia’s total sales. After the company stopped the illegal practice, its daily revenue fell sharply. It also became clear that major brands such as Nike and Nordstrom were affected.

Not a Technical Error but a Deliberate Feature

Previously, Phia representatives had tried to describe the incident as a simple “software error.” However, a Bloomberg report revealed that it had been created as a feature that could be deliberately switched on and off. Following the new allegations, startup representatives denied some claims but said they would learn from the situation. TechCrunch’s requests for comment have not yet received a response.

Phia launched in April last year as a Google Flights-like platform designed to help shoppers find the best prices across various retail chains. However, investigations published during the summer revealed that the company had lost nearly half of its employees since the beginning of the year, while many brands were not even aware that they were listed in the app. The startup had also previously faced other scandals involving the unauthorized collection and tracking of users’ personal data.