The gap between what Phia said and what the data shows
When Bloomberg first reported in July that Phia's browser extension was taking commissions for sales it never influenced, the company had a ready answer: it was a software bug, discovered the same day reporters called.
That story didn't hold.
According to internal Slack messages and people with knowledge of the matter — who asked not to be identified because they weren't authorized to speak publicly — co-founders Phoebe Gates and Sophia Kianni were aware of the practice for at least seven months, going back to December. The company's public statement on July 8 said it had only learned of the situation 'within the last 24 hours.'
What cookie-stuffing actually is
Phia operates as a browser extension that finds discount codes during online checkout. When a shopper uses it to complete a purchase, Phia earns a commission from the retailer. Standard affiliate marketing.
The problem: Phia's extension was also designed to drop a tracking cookie into the checkout process even when the user never engaged with Phia's product. That cookie told retailers — including Nike, Gap, and Nordstrom — that Phia had driven the sale. It hadn't. The retailers paid commissions anyway.
A Bloomberg review of Phia's historical source code confirmed these features existed. Advertising consultant Ben Edelman, who reviewed the same code and data from impacted merchants, called it 'a multipart effort designed to inflate Phia revenue despite lack of benefit to merchants.'
The revenue math tells the story
An internal revenue chart seen by Bloomberg shows average daily revenue dropped from roughly $80,000 to between $10,000 and $28,000 after Phia disabled the features on July 7. A Phia data scientist posted on Slack that same day estimating cookie-stuffing accounted for about 51% of the merchandise value Phia claimed credit for in June.
Phia's spokesperson disputed that figure, saying the analysis used 'an incorrect methodology that overstated the potential impact,' and that the revenue drop also reflected the company disabling most of its monetization efforts — not just the cookie-stuffing features.
The company says it has begun issuing transaction reversals to brand partners and is hiring a head of compliance.
What this means for founders
Cookie-stuffing is broadly prohibited by affiliate marketing partners. Edelman put it plainly: 'Phia should have spent more time learning the contracts to which they were bound and less time building tricks for quick profit.'
The playbook here is a cautionary one. Inflating revenue metrics through attribution manipulation might juice a dashboard in the short term, but it destroys the one asset early-stage companies can't buy back: trust with the retail partners whose commissions fund the business. When half your revenue evaporates the moment you stop the trick, you don't have a growth story — you have a liability. Founders who build on real customer value move faster and last longer. The math, eventually, always comes out.
