Phoebe Gates is facing fresh scrutiny over her shopping start-up Phia after a Bloomberg investigation reportedly found that she and co-founder Sophia Kianni were aware of features that could improperly claim credit for online sales months before the company publicly described the issue as a software bug.
The allegations have placed the 23-year-old entrepreneur's business ambitions under a harsh spotlight. Gates, the daughter of Microsoft co-founder Bill Gates, has previously spoken about wanting to establish herself on her own terms, despite the attention surrounding her billionaire family background.
What Is Phia Accused Of?
Phia is a digital shopping assistant that operates through a browser extension, helping users find discounts and deals from retailers. Its business model relies partly on affiliate commissions, meaning the company can earn money when it is credited with helping generate a purchase.
The controversy centres on what is known as 'cookie stuffing'–a practice in which tracking cookies are placed on a user's browser in a way that can allow an affiliate to claim credit for a sale it did not genuinely generate.
According to a media outlet reporting, Phia's software could place affiliate cookies even when shoppers had not taken the action normally required for the company to receive credit. The allegations reportedly involved sales connected to major retailers including Nike, Nordstrom and Gap.
Phia has disputed aspects of the reporting and has not been charged with a crime.
Leaked Messages Put Gates Under Pressure
The most damaging part of the latest allegations concerns internal communications.
The media outlet reportedly reviewed Slack messages and other internal material suggesting Gates and Kianni were aware of automatic cookie-placement features months before Phia publicly addressed the issue.
One message attributed to Gates in December reportedly raised concerns about whether the feature was operating across the company's retail partners and asked whether Phia was 'monetising on all gmv'.
They also reported that an internal dashboard described the function as 'enable coupon auto drop'–language that appears to contradict the company's earlier characterisation of the issue as a bug.
Separately, Kianni allegedly discussed a possible feature that would place a cookie when a user attempted to dismiss a Phia pop-up. A Phia spokesperson said this feature was never implemented.
Revenue Plunged After Features Were Disabled
The allegations have also raised questions about how significant the disputed technology was to Phia's business.
According to the news media outlet, cookie stuffing accounted for about 51% of the merchandise value Phia claimed credit for in June. After the disputed features were disabled in July, average daily revenue reportedly fell from roughly $80,000 (£60,000) to between $10,000 (£7,500) and $28,000 (£21,000).
Phia has pushed back against that interpretation, saying the sharp decline was also linked to the company disabling most of its monetisation efforts at the same time.
The company has said it is reviewing transactions, issuing reversals to brand partners where misattribution occurred and hiring a head of compliance.
Phoebe's 'Desire To Prove Myself'
The controversy is particularly striking given Gates' previous comments about the pressure of being the daughter of one of the world's most famous billionaires.
She has spoken about the insecurity surrounding her 'nepo baby' label and previously said she had 'such a desire to prove myself', expressing an ambition to build something independently of her parents.
That background has inevitably become part of the conversation around Phia, which raised $30 million (£22.5 million) in 2025 from high-profile backers including Hailey Bieber, Kris Jenner and Spanx founder Sara Blakely.
For Gates, the latest allegations therefore threaten to overshadow the image of a young founder attempting to carve out her own place in the business world.
What Happens Next?
The allegations do not mean Gates faces criminal charges. Legal experts have said that although federal wire fraud can carry a statutory maximum of 20 years, prosecutors would need to prove that she knowingly participated in a scheme to defraud others.
The more immediate risks could instead involve financial disputes with affected companies and affiliate networks. Phia has already said it is working on transaction reversals, while its affiliate relationships have also come under scrutiny.
For now, the controversy leaves Gates facing a difficult test of the very independence she has said she wants to prove—as scrutiny intensifies over how Phia made money and what its founders allegedly knew about the technology behind it.
