Phoebe Gates’ startup Phia faces scrutiny over affiliate tracking claims

MUMBAI: Sometimes the biggest checkout surprise isn’t the discount, it’s who gets paid. That’s the controversy engulfing Phia, the shopping startup co-founded by Phoebe Gates, daughter of Microsoft co-founder Bill Gates, after allegations that its browser extension claimed affiliate commissions it had not genuinely earned.

A Bloomberg investigation has alleged that Phia’s browser extension used a practice known as “cookie stuffing” to insert its own affiliate tracking codes during online checkouts, potentially diverting commissions from other publishers and marketing partners. The findings have also prompted affiliate marketing platform Impact.com to suspend the startup while it investigates the matter.

Founded in 2025, Phia positions itself as an AI-powered shopping assistant that helps consumers compare prices for fashion products across retailers and automatically searches for discount codes during checkout. The company has raised more than $40 million in funding and counts Khloé Kardashian and Hailey Bieber among its investors.

According to Bloomberg, tests conducted over one week, supported by independent affiliate marketing researcher Ben Edelman and browser extension Capital One Shopping, found that Phia silently opened a background browser tab during checkout. The extension allegedly loaded its own affiliate link before automatically closing the tab within seconds, allowing it to overwrite referral codes from other affiliates even when shoppers had arrived through another publisher’s link or directly via a retailer’s website.

The investigation reported that the behaviour was observed across more than 50 retail websites and several major affiliate marketing networks. It further alleged that referral attribution could be replaced even when users reached retailers through Google advertisements or competing affiliate partners.

Affiliate marketing typically rewards publishers only when they genuinely influence a purchase by directing shoppers to a retailer. According to Edelman, affiliate programme rules require commissions to be based on authentic user clicks and generally prohibit artificially generated or simulated clicks that alter attribution.

Capital One Shopping reportedly shared similar findings with retailers, warning that such practices could deprive legitimate publishers of commissions while forcing advertisers to pay for referrals they never actually received.

Following the allegations, Impact.com suspended Phia from its affiliate platform after determining that the reported behaviour appeared inconsistent with its policies. The company said it had received reports from a third party and subsequently launched an investigation.

Cookie stuffing is widely prohibited across affiliate marketing networks because it enables one publisher to claim credit for another’s referral without genuinely influencing the consumer’s purchase journey.

Phia, however, has disputed any deliberate wrongdoing. After being contacted by Bloomberg, the company acknowledged that a recent software update had created attribution issues affecting a subset of users.

A spokesperson said the issue was identified and fixed shortly after the company was notified. Bloomberg reported that subsequent testing found the extension no longer automatically replaced referral codes. Phia also maintained that it regularly undergoes compliance audits conducted by affiliate network partners.

The allegations place Phia among a growing list of companies facing questions over affiliate attribution practices. PayPal-owned Honey is currently defending a class-action lawsuit involving similar claims, although PayPal has denied the allegations.

For Phia, the episode represents an early test of credibility. While the startup continues to promote itself as an AI-powered shopping companion, the spotlight has now shifted from helping consumers save money to how those savings and the commissions behind them are actually generated.