Phia accused of ‘cookie stuffing,’ taking affiliate credit on purchases it didn’t earn

Washington DC, United States Jul 11, 2026 ALN: Phia, the shopping startup co-founded by Bill Gates’ daughter, Phoebe Gates, and Sophia Kianni, has been accused of a practice known as “cookie stuffing,” which may have helped the product receive commissions and credit for sales it did not actually generate, according to a Bloomberg investigation.

The report has sparked controversy and led to Phia’s suspension from Impact.com, a leading affiliate and influencer platform. Other startups have been sued over “cookie stuffing,” notably Honey, which is owned by PayPal and remains the subject of an ongoing class action lawsuit.

Founded in 2025, Phia has raised more than $40 million in funding and has a star-studded list of investors, including Khloé Kardashian and Hailey Bieber. The startup developed an app as a browser extension that works somewhat like Google Flights, but for shopping. Phia helps customers find the lowest-priced items across various retailers as well as discount codes to use when shopping. The company takes a commission on purchases made through the platform, an industry practice known as affiliate marketing.

The Bloomberg investigation, as well as findings from an independent consultant and a competitor, found that if a user shopped at an online retailer — even if they arrived at the site on their own or through another affiliate program like Wirecutter — Phia would open a new tab in the background. During the checkout process, Phia would override the referral codes from other affiliates and instead inject its own, allowing it to take credit for and potentially receive a commission on a purchase it didn’t earn.

Once the issue was flagged to Phia, a spokesperson told Bloomberg that all necessary changes had been made to fix the issue. A check by Bloomberg found the issue had been resolved. It’s unclear if the fix is enough to satisfy the retailers and affiliate partners that work with Phia.

Phia has not responded to requests for comment regarding the allegations.

This article was updated to clarify the celebrity investors in the company.

The practice of cookie stuffing, which has come under scrutiny in recent years, involves the insertion of tracking cookies into a user's browser without their consent, often during the checkout process of an online transaction. This allows the affiliate to claim commissions on sales they did not facilitate, effectively misleading retailers and consumers alike. This practice undermines the integrity of affiliate marketing, which relies on trust and transparency between affiliates and merchants.

Affiliate marketing is a performance-based marketing strategy where businesses reward outside partners (affiliates) for generating traffic or sales through the affiliate's marketing efforts. It has become a significant revenue stream for many online retailers, as it allows them to reach wider audiences without upfront advertising costs. However, the rise of unethical practices like cookie stuffing poses a threat to the sustainability of this model.

Phia's allegations are particularly concerning given the startup's high profile and substantial funding. With investors like Khloé Kardashian and Hailey Bieber, Phia has garnered attention not only for its innovative approach to shopping but also for its celebrity connections. However, this controversy could tarnish the brand's image and impact its relationships with both consumers and retailers.

The suspension from Impact.com, a prominent platform in the affiliate marketing space, could have significant implications for Phia's operations. Impact.com provides a network where brands and influencers can connect and collaborate, and being suspended from such a platform may limit Phia's ability to generate sales through affiliate marketing. This could lead to decreased revenue and affect the startup's growth trajectory.

The ongoing class action lawsuit against Honey, which has faced similar accusations of cookie stuffing, highlights the legal risks associated with such practices. As affiliate marketing continues to evolve, regulatory scrutiny is likely to increase, prompting companies to adopt more stringent compliance measures. Phia's situation may serve as a cautionary tale for other startups in the affiliate marketing space, emphasizing the importance of ethical practices and transparency.

In light of the controversy, Phia's leadership may need to take proactive steps to rebuild trust with its users and partners. This could involve implementing stricter guidelines for how its technology interacts with affiliate links, enhancing transparency in its operations, and possibly engaging in public relations campaigns to address consumer concerns. Building a reputation for ethical business practices will be crucial for Phia's long-term success in a competitive market.

The implications of this controversy extend beyond Phia itself. It raises broader questions about the accountability of tech companies in the affiliate marketing sector and the need for regulatory oversight to protect consumers and merchants from deceptive practices. As more consumers turn to online shopping, ensuring the integrity of affiliate marketing becomes increasingly vital for the sustainability of the e-commerce ecosystem.

In conclusion, while Phia has taken steps to rectify the situation following the allegations of cookie stuffing, the long-term impact of this controversy remains to be seen. The startup's ability to navigate this challenge will be critical in determining its future in the affiliate marketing landscape and its overall reputation in the competitive world of e-commerce.

The rise of digital commerce has transformed the retail landscape, with affiliate marketing becoming a key strategy for many brands seeking to expand their reach. However, as the industry grows, so do the challenges associated with ensuring ethical practices. Cookie stuffing is just one of several tactics that have raised red flags among regulators and consumers alike, prompting discussions about the need for clearer guidelines and stricter enforcement mechanisms.

The Federal Trade Commission (FTC) and other regulatory bodies have begun to pay closer attention to the practices of affiliate marketers, particularly as they relate to consumer privacy and the transparency of online transactions. This scrutiny has led to a heightened awareness among consumers about how their data is used and how affiliate programs operate, making it crucial for companies like Phia to align their practices with ethical standards.

As consumers become more informed, they are increasingly likely to support brands that prioritize transparency and ethical business practices. This shift in consumer behavior could have significant implications for companies that fail to adhere to these principles. For Phia, regaining consumer trust will require not only addressing the current allegations but also demonstrating a commitment to ethical practices moving forward.

Furthermore, the situation at Phia could serve as a catalyst for broader industry reforms. If the controversy leads to increased regulatory scrutiny, it may prompt other companies in the affiliate marketing space to reevaluate their practices to avoid similar pitfalls. The potential for lawsuits and reputational damage could encourage startups to adopt more responsible business models, thereby fostering a healthier ecosystem for affiliate marketing.

In summary, the cookie stuffing allegations against Phia underscore the complex dynamics of affiliate marketing in the digital age. As the industry grapples with the challenges of maintaining ethical standards, the actions taken by companies like Phia will be closely watched by regulators, competitors, and consumers alike. The outcome of this controversy may have lasting implications not only for Phia but for the entire affiliate marketing landscape as it continues to evolve.