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Phia Scandal Deepens as Founders Allegedly Knew of 'Cookie Stuffing' Months Ago

14 August 2026 · Source balance: Centre

Phoebe Gates and Sophia Kianni's shopping startup Phia is facing escalating allegations over 'cookie stuffing,' a deceptive practice where the app falsely claims credit for online sales it didn't drive. Bloomberg's initial July investigation reported the practice; follow-up reporting in August alleged the founders knew about it since at least December 2025—contradicting their earlier claim they only discovered it when reporters contacted them. Phia has raised over 43 million dollars and generated approximately 80,000 dollars daily before the practice was disabled, causing revenue to drop to between 10,000 and 28,000 dollars daily. The startup was suspended from the affiliate platform Impact.com, and similar cookie stuffing schemes have resulted in federal lawsuits and prison sentences. Phia says it will learn from the issue, though the practice carries a potential maximum penalty of 20 years in federal prison if prosecuted as wire fraud.

Key facts

  • Phia raised over 43 million dollars from investors including Khloé Kardashian and Hailey Bieber
  • Daily revenue dropped from approximately 80,000 dollars to between 10,000 and 28,000 dollars after the cookie stuffing features were disabled on July 7
  • Bloomberg reporting shows founders knew of the practice since at least December 2025, contradicting July statements they only became aware within 24 hours
  • Cookie stuffing can be prosecuted as federal wire fraud with a maximum penalty of 20 years in prison
  • Phia was suspended from Impact.com, a major affiliate marketing platform, in July 2026

How different outlets framed it

Left-leaning coverage: Tech accountability outlets and business press focus on corporate misconduct and wealthy founders evading responsibility. They emphasize Bloomberg's investigative rigor, the contradiction between company statements and leaked Slack messages, and how privileged founders may face different consequences than typical entrepreneurs would. They highlight the deceptive nature of the practice and its harm to smaller affiliate marketers.

Right-leaning coverage: Conservative outlets emphasize the 'nepo baby' angle—that Phoebe Gates benefited from her father's wealth and connections to launch the startup. They highlight the severity of potential legal jeopardy (20-year maximum prison sentence) and frame it as a cautionary tale about privileged entrepreneurs. Some outlets add skeptical commentary about Bill Gates and his family.

Limits of this briefing

No criminal charges have been filed, and Phia has disputed some allegations while promising to improve. The company's internal communications were leaked and have not been independently verified by law enforcement or regulatory agencies. Determinations about intent and knowledge remain contested between the company and journalists.

Sources

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