Phoebe Gates and Sophia Kianni reportedly knew Phia was ‘cookie stuffing’ for months

Phoebe Gates and Sophia Kianni didn't discover their startup's cookie stuffing problem when Bloomberg called. They knew in December. They discussed it in Slack. They built it as a feature with an on-off switch. Then they told reporters it was a bug.

The lie is the story. Not the affiliate fraud itself — though stuffing cookies to steal referral commissions from legitimate marketers is fraud, plain and simple. The lie reveals the founders' character. When caught, they didn't own it. They invented a convenient technical glitch and hoped the press would move on.

Bloomberg's follow-up reporting makes the timeline damning. December: internal messages show Gates, Kianni, and engineers coordinating the practice. July: a spokesperson calls it a bug the company only learned about when Bloomberg asked. August: leaked Slacks prove the July statement was false. The founders knew. They authorized. They managed.

Cookie stuffing wasn't marginal. It powered a "good chunk" of Phia's sales. Revenue dropped "sizably" when the feature was killed. That tells you the business model depended on theft. Nike and Nordstrom paid commissions for traffic they never received. Legitimate affiliates — the bloggers, the comparison sites, the reviewers who actually drove purchases — got nothing. Phia intercepted the cookie, claimed the referral, collected the check.

The July "bug" claim wasn't a misunderstanding. It was a crisis management decision. A startup that builds a toggle for a prohibited practice, uses it for months, then feigns surprise when caught — that's not a team that made a mistake. That's a team that calculated the risk of getting caught against the revenue gain and bet on secrecy.

Investors already had the ick. Puck's reporting showed Phia shed nearly half its full-time staff since January. Brands discovered they were listed on the app without consent. The affiliate aggression was visible to anyone paying attention. Now we know the aggression was criminal.

This is the same company that quietly vacuumed users' browsing behavior across the web and shipped it to their servers. No consent. No transparency. A "shopping assistant" that spied on everything you did online. The pattern is clear: Phia treats user data and partner relationships as resources to extract, not obligations to honor.

The July 7 shutdown and the promised transaction reversals are cleanup, not accountability. The head of compliance hire is theater — compliance officers don't prevent fraud when the founders order it. The "learn from this" statement is insulting. You don't learn not to steal affiliate commissions. You either have the integrity to refuse or you don't.

Gates and Kianni built a Google Flights for shopping. They raised money on that vision. They hired engineers who presumably knew better. Somewhere in the Slack history, someone might have objected. The messages Bloomberg saw show coordination, not dissent. That silence is complicity.

Retailers should sue. Affiliate networks should ban Phia permanently. Investors should write the stake to zero and demand the founders return any personal gains. The ecosystem survives because bad actors get expelled. Phia has earned expulsion twice over.

The founders' next move will be quiet contrition. A blog post. A podcast appearance about "hard lessons." Maybe a pivot to AI. Don't believe it. People who lie to reporters about fraud they engineered don't suddenly discover ethics. They discover better cover stories.

The shopping startup space doesn't need more comparison engines. It needs trust. Phia burned its own. The founders knew. They lied. They got caught. Everything else is noise.