Phoebe Gates’s Phia Drama Is Getting Even Stickier

Key Points:

• Phia co-founders Phoebe Gates and Sophia Kianni knowingly implemented features in their AI shopping platform that fraudulently earned commissions on sales they did not drive, contradicting their earlier claim that the issue was a software bug.
• The company engaged in "cookie stuffing," an affiliate marketing fraud where cookies are dropped without user interaction to claim credit for sales, a practice considered wire fraud under U.S. law with severe penalties.
• Internal communications revealed Gates and Kianni expressed concern over insufficient automatic cookie dropping and encouraged maximizing this practice to increase revenue.
• After Bloomberg's investigation, Phia removed the problematic features in July 2026, resulting in a significant drop in daily revenue from around $80,000 to between $10,000 and $28,000.
• Phia has committed to reviewing all transactions, issuing reversals to affected brand partners, hiring a head of compliance, and improving user experience with new features to prevent future misconduct.