(Luis Cornelio, Headline USA) The daughter of billionaire Bill Gates is facing scrutiny over accusations that she knew about and pushed for an alleged money-making scheme at her start-up company.
Phoebe Gates, along with her friend Sophia Kianni, is the co-founder of Phia, an e-commerce company that helps users find products at lower prices through a browser extension.
When a customer makes a purchase through the platform, Phia collects a commission from the retailer. However, at the center of the controversy are allegations that Phia collected commissions from sales it did not actually drive.
Specifically, Bloomberg reported Tuesday that Phia was designed to place “cookies,” or digital trackers, on users’ browsers, creating the appearance that purchases originated through Phia.
The tactic, known as “cookie stuffing,” allegedly allowed Phia to collect commissions on purchases it did not generate, unbeknownst to users and business partners.
In fact, Phia’s daily revenue dropped from approximately $80,000 to between $10,000 and $28,000 after the company removed the code that triggered the cookie stuffing, according to Bloomberg.
The outlet reported Tuesday that both Gates and Kianni knew about the cookie-stuffing features since December and reportedly pushed for their use. The outlet based its reporting on internal communications and anonymous sources who previously worked at Phia.
“The strategy, which is broadly prohibited by Phia’s commercial partners, was implemented at least as far back as December, the internal chats show, and involved purchases made on the websites of several major retailers, including Nike, Gap and Nordstrom,” Bloomberg reported. “A Bloomberg review of Phia’s historical source code confirmed these features existed.”
In response to the allegations, a Phia spokesperson said that “any features causing misattributions were immediately removed over a month ago on July 7.”
The spokesperson said that the company is reviewing transactions and would issue refunds for the commissions of transactions stemming from the “misattribution.”
The Phia spokesperson also claimed the company is hiring a “head of compliance to make sure something like this never happens again.”
Gates and Kianni launched Phia in 2025 with $30 million in backing from investors including Hailey Bieber, daughter of actor Stephen Baldwin and wife of pop star Justin Bieber, and Kris Jenner, the matriarch of the Kardashian-Jenner family, according to the New York Post.
The allegations bear similarities to a 2014 federal case involving an online retailer.
In 2014, the DOJ prosecuted a man named Jefferson Bruce McKittrick over a scheme that allowed him to collect more than $1.8 million in unearned sales commission from an online retailer.
He pleaded guilty to one count of “information charging conspiracy to commit wire fraud.”
At the time, then-U.S. Attorney Kenyen R. Brown criticized the scheme and the harms it causes to e-commerce in a statement.
“Internet fraud has a devastating impact on our consumers, as advertising expenses are added to the cost of items the consumer buys,” Brown said. “We are committed to working with our law enforcement partners to stop internet fraud.”
Federal offenses tied to the scheme carry a maximum penalty of 20 years in prison, according to the DOJ.
It is unclear whether the DOJ is looking into the allegations against Phia.
