Phia Co-Founders Used Cookie Stuffing to Inflate Revenue

The e-commerce startup Phia implemented software features designed to falsely claim credit for online sales to inflate commission earnings through a practice known as cookie stuffing. The company's browser extension automatically injected tracking cookies into the checkout processes of major retailers, including Nike, Gap, and Nordstrom, even when users did not interact with the service. Internal communications and source code analysis reveal that co-founders Phoebe Gates and Sophia Kianni were aware of these features since December 10, contradicting public claims that the issue was a software bug discovered only in July.

Evidence indicates the founders actively pushed for automatic cookie-drops to capture revenue from transactions they did not drive. In June, this practice reportedly accounted for approximately 51% of the company's gross merchandise value. Following a Bloomberg report, Phia removed the features on July 7 and suspended monetization efforts. This led to a sharp revenue decline, with daily earnings plummeting from approximately $80,000 to between $10,000 and $28,000.

In response to the findings, the affiliate network Impact.com suspended Phia from its marketplace and began reallocating unpaid commissions. Phia has since started issuing transaction reversals to its brand partners and is hiring a head of compliance. The company maintains that the revenue drop also reflects a voluntary shutdown of monetization and asserts that all misattribution features were removed by July 7.