Shopping startup Phia, co-founded by Phoebe Gates and Sophia Kianni, is reportedly facing renewed scrutiny over its business practices. New reports suggest that Gates and Kianni were aware their company was engaged in 'cookie stuffing' as far back as December.
Cookie stuffing is a controversial practice where a company takes credit and commission for affiliate purchases it did not help to generate. This practice is typically banned in affiliate marketing contracts due to its unfair nature, as it can divert referral revenue from other marketers.
Earlier this year, Bloomberg reported on Phia's alleged cookie stuffing. At that time, a Phia spokesperson stated the company only became aware of the issue when contacted by Bloomberg. However, new reporting, based on leaked Slack messages and sources, indicates that Gates and Kianni discussed these practices with executives and engineers.
The latest reports suggest that cookie stuffing accounted for a significant portion of Phia's sales, with the company experiencing a notable drop in daily revenue after ceasing the practice. Retailers reportedly affected include Nike and Nordstrom. While a Phia spokesperson previously referred to the cookie stuffing as a bug, Bloomberg now reports it was a 'purposefully built feature' that could be activated or deactivated.