Bill Gates’ daughter, Phoebe Gates, is facing scrutiny over allegations surrounding the sales-attribution practices of Phia, the shopping and price-comparison app she co-founded with Sophia Kianni.
A new report claims that the company’s founders were allegedly aware of an issue involving potentially improper sales attribution months before the matter was publicly addressed.
The allegations have raised questions about how Phia credited itself for purchases made through participating retailers and whether the company’s founders knew the full extent of the problem before it was disclosed.
Table of Contents
- Phia Faces Cookie-Stuffing Allegations
- How Phia’s Shopping System Works
- What the Alleged Cookie Stuffing Involved
- Founders Allegedly Knew About the Issue
- Phia’s July Response
- Company Removes Features
- Questions Over Sales Attribution
- What Happens Next?
Phia Faces Cookie-Stuffing Allegations
According to people familiar with the matter cited by Bloomberg, Gates and Kianni were allegedly aware of concerns surrounding the sales-attribution system as early as December.
The report claims the founders discussed internal Slack messages relating to the practice.
The allegations are significant because Phia’s business model relies partly on commissions from retailers when purchases are attributed to the platform.
If transactions were incorrectly attributed to Phia, the company could potentially receive commissions for sales that it did not actually generate.
However, the allegations have not been established as wrongdoing by a court, and the company has disputed aspects of the reporting.
How Phia’s Shopping System Works
Phia is designed to help shoppers compare prices, discover discounts and find promotional codes while shopping online.
The company also operates a browser extension intended to help consumers locate available savings during the checkout process.
When a shopper makes an eligible purchase through Phia’s system, participating retailers can attribute the transaction to the platform and pay Phia a commission.
This type of affiliate marketing is widely used across the e-commerce industry.
The controversy centres on whether some of those purchases were incorrectly attributed to Phia despite shoppers not actually using the app to generate the sales.
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What the Alleged Cookie Stuffing Involved
The reported practice is known as “cookie stuffing.”
In simple terms, cookies are small pieces of data websites and online services use to track activity, including referrals and purchases.
Affiliate marketing systems can use tracking cookies to determine which platform referred a customer to a retailer.
According to the allegations reported by Bloomberg, Phia’s browser extension allegedly placed a tracking cookie during the checkout process, potentially causing a purchase to be credited to Phia even when the customer had not used the service to initiate the transaction.
If accurate, such a system could artificially increase the number of sales attributed to Phia.
The allegations are particularly important because affiliate commissions depend heavily on accurate attribution.
Founders Allegedly Knew About the Issue
One of the most serious aspects of the report is the allegation that Gates and Kianni were aware of the practice months before the company publicly acknowledged the issue.
Bloomberg cited people familiar with the matter who claimed that the founders discussed internal communications about the practice as early as December.
That allegation appears to conflict with a statement issued by Phia in July.
At that time, a company spokesperson said Phia had only become aware of the “misattributions” within the previous 24 hours.
The spokesperson said the team immediately worked to identify and resolve the problem.
Phia has not publicly confirmed the allegation that its founders knew about the practice before July.
Phia’s July Response
Following the public scrutiny, Phia said that the features responsible for the alleged misattributions had been removed.
The company said the problematic features were removed on July 7 and that it was working with brand partners to reverse affected transactions.
Phia also announced plans to hire a head of compliance.
The move was presented as part of efforts to strengthen the company’s internal controls and prevent similar problems from occurring again.
The company’s response suggests that it recognised the seriousness of the sales-attribution concerns.
Company Removes Features
An alleged Slack message from a Phia data scientist dated July 7 reportedly estimated that cookie stuffing represented approximately 51 percent of the sales Phia claimed credit for during June.
If that figure is accurate, it would indicate that the issue potentially affected a substantial portion of the company’s reported sales-attribution activity during that period.
However, the figure comes from an alleged internal message reported by Bloomberg and should not be treated as an independently established fact.
Phia has said it removed the features associated with the misattributions and began working to correct affected transactions.
Questions Over Sales Attribution
The controversy has raised broader questions about transparency in affiliate marketing and e-commerce attribution.
Companies operating in the sector rely on tracking technology to determine who should receive commissions for online purchases.
When attribution systems fail or are manipulated, retailers, consumers and affiliate companies can all be affected.
For Phia, the allegations could create additional pressure to demonstrate that its systems accurately reflect genuine customer referrals.
The controversy could also become an important test for the young company’s compliance and governance systems as it continues to grow.
What Happens Next?
Phia’s decision to remove the disputed features and hire a compliance executive suggests the company is attempting to address concerns surrounding its attribution system.
However, questions remain about when the company first became aware of the alleged practice and how extensively transactions may have been affected.
The company has not publicly addressed the specific allegation that Gates and Kianni knew about the issue months before July.
For now, the allegations remain allegations, and no conclusion should be drawn about individual wrongdoing without further evidence or official findings.
The controversy nevertheless places renewed attention on Phia, its founders and the rapidly growing world of shopping apps and affiliate marketing.
As more information emerges, retailers and consumers will likely be watching closely to see how Phia handles affected transactions and whether its new compliance measures provide greater transparency.
For the original reporting and additional details, link to Bloomberg.
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