Remember a few weeks ago when the news broke that Phia, the AI shopping startup co-founded by Phoebe Gates and Sophia Kianni, was overriding other affiliates’ referral codes during checkout and inserting its own, claiming credit and commissions on purchases its browser extension played no part in driving? Pepperidge Farm remembers…
The company claimed at the time that a recent code release had caused the misattribution for a subset of users and that its team worked overnight to resolve the problem once notified. So just a simple mistake that could happen to anyone, right? Including Bill Gates’ daughter. No foul play happening, right? WRONG!
It turns out that Gates and Kianni actually pushed for those commission-stealing features, according to internal communications and people familiar with the matter. Bloomberg reports that the founders knew about the practice for at least seven months going back to December, despite claiming that they had just become aware of the situation “within the last 24 hours.”
I can only imagine the lawyer’s defense on this one… “No your honor. When my client said that, she was referring to the fact that she just found out they had been caught within the last 24 hours.”
In fact, what Phia called a “bug” was actually an internally developed feature called “enable coupon auto drop” that could be turned on and off remotely by the company. Gates had conversations with developers about the feature from at least Dec 18 onward after becoming concerned that the browser extension wasn’t generating enough revenue from its retail partners, asking for confirmation that the feature was turned on.
Wait, it gets even worse….
There was also a feature called “passive trigger” that was active from October 2025 to July 2026 that automatically dropped a cookie every two hours on any “top 1000 website” where the user had previously interacted with Phia!
Well, this couldn’t have inflated sales by that much, right?
Wrong again! Bloomberg discovered that the cookie stuffing practice was responsible for a significant portion of Phia’s attributed sales. After the company disabled the features in early July, average daily revenue dropped from around $80k to between $10k and $28k, according to an internal revenue chart seen by Bloomberg. And you’re telling me no-one noticed? Okay…
So in other words, Phia was committing fraud, intentionally stealing sales to inflate their sales figures to investors. The New York Post reports that Phia’s actions could be treated as federal wire fraud and carry a maximum penalty of up to 20 years in prison for the founders, plus fines and restitution. Well, maybe if she was poor. Personally, I hope they don’t get charged because I don’t want to deal with the aftermath of Gates’ dad releasing biowarfare mosquitos into the world in a vengeful rage.
Honestly, the whole scandal is flabbergasting. I can’t tell you how many times my eyes bugged out and I said “Are you serious?!” when reading that Bloomberg report. What a story!
