Photo: Cindy Ord / Getty Images Entertainment / Getty Images
Phoebe Gates, daughter of Bill Gates, and her startup Phia are under scrutiny for allegedly engaging in "cookie stuffing" to claim credit for online sales they did not drive. According to a Bloomberg report, Gates and co-founder Sophia Kianni were aware of these practices for months. The report suggests that Phia's app dropped tracking cookies even when users did not utilize its coupons, allowing the company to claim commissions improperly.
Phia initially labeled the issue as a software bug, but said the features were removed on July 7. The company is reviewing transactions and reversing any improper commissions. Legal experts warn that cookie stuffing could be prosecuted as federal wire fraud, which carries significant penalties. A Futurism article highlighted that similar cases have resulted in severe legal consequences, including prison sentences.
Phia, which launched as a shopping assistant platform, raised over $43 million and gained attention due to its high-profile founders. However, following the allegations, the company experienced a significant drop in daily revenue, and some affiliates have severed ties. A spokesperson for Phia stated, "We will learn from this and want to ensure our users have the best possible shopping experience."
The controversy surrounding Phia has raised questions about the potential legal repercussions for Gates and Kianni. As the investigation continues, the startup faces challenges in restoring its reputation and maintaining its business relationships.