Phia founders knew of ‘cookie stuffing’ practices for months, reports say
The shopping startup previously dismissed the issue as a technical bug, but leaked internal communications suggest the practice was a deliberate feature that drove a significant portion of sales.
Phia, the comparison shopping startup co-founded by Phoebe Gates and Sophia Kianni, is facing renewed scrutiny following a Bloomberg report indicating the founders were aware of the company’s ‘cookie stuffing’ practices as early as December. The allegations contradict earlier statements from the company, which had previously dismissed the issue as a technical bug.
Cookie stuffing is a controversial affiliate marketing tactic where a platform takes credit for purchases it did not generate, often violating the terms of service with retail partners. According to the report, this practice constituted a significant portion of Phia’s sales. The company experienced a noticeable drop in daily revenue after the practice was ceased, highlighting its reliance on the method.
Leaked internal Slack messages obtained by Bloomberg show that Gates and Kianni discussed the practice with other executives and engineers. These communications suggest the feature was purposefully built and could be toggled on and off, rather than being an accidental error. Affected retailers include major brands such as Nike and Nordstrom, some of whom were reportedly unaware they were listed on the app.
When Bloomberg first reported on the issue in July, a Phia spokesperson stated the company was only made aware of the problem when contacted by the media. The spokesperson described the activity as a bug at the time. However, the new reporting indicates the founders had knowledge of the practice months prior to the initial disclosure.
A Phia spokesperson told Bloomberg that the company rebuffed some of the publication’s claims but stated it would “learn from this.” The startup did not immediately respond to requests for comment from TechCrunch. The controversy coincides with broader operational challenges, including workforce reductions and investor concerns regarding the company’s aggressive affiliate marketing strategies.
Phia launched in April with the aim of providing a comparison shopping experience similar to Google Flights. Since its inception, the company has faced multiple controversies, including allegations regarding the secret collection of sensitive user data and tracking behaviour across the web.
