Is Phia phucked?
That’s one takeaway from Bloomberg’s latest exposé on the affiliate shopping startup co-founded by Phoebe Gates, daughter of Bill Gates.
Last month, Bloomberg reported that Phia had been cookie stuffing to claim commissions on sales it didn’t actually drive. At the time, Phia said the behavior resulted from a technical bug that it had only just discovered and quickly fixed.
Bloomberg’s latest report paints a very different picture, however.
According to internal Slack messages and Phia’s own code (!), the cookie stuffing wasn’t simply a bug. Features that automatically dropped affiliate cookies were deliberately built into Phia’s product, and co-founders Gates and Sophia Kianni allegedly knew about and encouraged their use.
Why This Matters:
This is a huge revelation from Bloomberg because the publication very clearly has receipts.
Slack messages cited in the report show Gates herself asking developers to confirm Phia was automatically dropping cookies across retailers so the company could monetize more sales. In another exchange, Kianni reportedly wrote, “Whatever we can do to keep these cookies dropping will be amazing thank you.”
Bloomberg also reports that an internal dashboard included a feature literally called “enable coupon auto drop,” which could be toggled on and off. It was reportedly turned on in December and disabled the same day Bloomberg first contacted Phia in early July.
Cookie stuffing isn’t new, of course. From that history, we know there have been cases where affiliate marketers accused of manipulating attribution to get commissions on sales they didn’t generate have faced lawsuits and even criminal prosecution.
Experts React:
As you can imagine, X had a field day with the report. Here are some of the best reactions:
Our Take:
Phia had a straightforward defense for the first Bloomberg story. It was a bug and we fixed it, essentially.
This report makes that defense much harder to maintain. Affiliate partners are already reviewing transactions and Phia says it’s reversing related commissions. Lawsuits wouldn’t exactly be surprising given the allegations and the story’s traction.
Of course, there’s the Gates factor. Phoebe Gates is the daughter of one of the world’s richest and most influential people. So far, that connection has meant more scrutiny for Phia. But soon, it could help insulate the company from some of the consequences another startup might face. We shall see.
