Phoebe Gates, the daughter of Microsoft co-founder Bill Gates, is facing intense legal and industry scrutiny following allegations that her shopping technology startup Phia is engaged in an online scheme known as “cookie stuffing.”
The company is an AI-driven shopping assistant and browser extension co-founded with her former Stanford roommate Sophia Kianni which was basically designed to find discount codes for users.
However, independent technical investigations and internal company records reveal that the software secretly placed tracking files “cookies” during online checkouts to collect referral commissions from major retail brands and online publishers.
When reports of the activity surfaced in July, company representatives publicly characterized the behavior as an unintended codebase glitch that engineers resolved overnight.
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However, according Bloomberg, senior executives, including Gates and his daughter Phoebe Gates, were aware of the automated cookie placement.
“Worried this is an issue across the board…can u confirm auto pop for cookie drop is live on ALL sites w a coupon to confirm we are monetizing on all gmv,” she wrote on Dec. 18, in the messages they found in a Slack channel.
Internal records indicate that Gates discussed verifying whether automated cookie drops were enabled across all partner merchant sites to ensure maximum platform monetization.
In affiliate marketing, cookie stuffing occurs when a browser plugin silently loads tracking files to take credit for an online transaction.
This process overrides legitimate referral links belonging to independent creators, deal sites, and publishers, diverting commissions for sales the tool did not influence.
According to internal data analysis, the automated tracking accounted for the bulk of Phia’s earnings. After executives toggled off the feature on July 7, average daily revenue dropped from approximately $80,000 to between $10,000 and $28,000.
In June, the practice accounted for roughly 51% of the merchandise value claimed by the startup.
The fallout from the investigation was immediate leading to affiliate network Impact.com to suspend Phia while auditing transactions, and retailers including Nike and Nordstrom were identified among the affected merchants.
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Legal experts noted on social media that intentionally deploying software to misappropriate financial credit across state lines can attract federal wire fraud charges, an offense that carries a statutory maximum penalty of up to 20 years in prison alongside fines and restitution.
Phia representatives stated that features causing misattributions were removed and that the startup is actively issuing transaction reversals to brand partners while hiring a compliance head.
A spokesperson added that the revenue drop also reflected a broader pausing of monetization efforts and argued that data reporting overstated the issue.
As affiliate platforms work through transaction reversals, the controversy heightened regulatory and operational risks for automated browser extensions operating in digital e-commerce.