Phia startup faces allegations of illicit cookie stuffing

Phoebe Gates and Sophia Kianni, co-founders of the AI-powered shopping startup Phia, are facing allegations of engaging in “cookie stuffing.” Investigations, including reports from Bloomberg, suggest the company’s browser extension was used to improperly claim affiliate commissions by dropping tracking cookies even when the app did not drive the sale.

Internal Slack communications reportedly indicate that Gates and Kianni were aware of these practices as early as December 2025, contradicting earlier company statements that the issue was a recent “software bug.” The practice allegedly affected major retailers such as Nike, Nordstrom, and Gap. Following the exposure of these tactics, Phia’s reported daily revenue saw a significant decline, dropping from approximately $80,000 to between $10,000 and $28,000.

Legal experts note that such practices can be prosecuted as federal wire fraud, which carries a maximum sentence of 20 years in prison. While criminal charges would require proof of a knowing scheme to defraud, the founders may face substantial civil lawsuits and financial penalties from affected business partners.