Phia, the shopping startup co-founded by Phoebe Gates and Sophia Kianni, is once again under fire for its alleged business practices. The latest issue stems from earlier this year when Bloomberg published an investigation that mapped out how Phia was taking credit and commission for affiliate purchases it did not help to generate, known as cookie stuffing.
It’s a controversial practice that can get startups sued, mainly because it’s seen as taking referral revenue away from other affiliate marketers. Usually, when affiliate platforms like Phia sign on to work in a marketplace, they sign a contract stating that cookie stuffing is banned because it’s unfair.
When Bloomberg first reported on Phia’s cookie stuffing, a Phia spokesperson told the publication that the company was only made aware of the issue when Bloomberg reached out to them.
But new reporting by Bloomberg shows that Gates and Kianni knew their startup was cookie stuffing as far back as December, based on leaked Slacks and sources familiar with the matter speaking to the publication.
The latest reporting found that cookie stuffing made up a good chunk of Phia’s sales and the company saw a sizable drop in daily revenue once it stopped the practice. The outlet also gained insight into the affected retailers, including Nike and Nordstrom.
