A month after Phia made headlines over reports that its browser extension was causing affiliate “misattributions,” new reporting claims that its co-founders knew for months about features that caused Phia to receive credit for sales it may not have driven. The Phoebe Gates and Sophia Kianni-founded startup initially attributed the issue to code associated with a recent software release, but the new allegations raise a potentially more consequential question: What did the company know about the alleged “cookie stuffing” at play, and when?
New reports based on internal communications and people familiar with the matter indicate that the co-founders were aware for months of features designed to insert affiliate cookies even when Phia may not have driven the underlying purchase.
According to Bloomberg, relevant discussions date back to December 2025, with an engineer reportedly raising concerns that a proposed practice could run afoul of Chrome’s policies. Phia told Bloomberg that the particular feature discussed was never launched. The company has also disputed aspects of Bloomberg’s reporting and said that features causing misattributions were removed on July 7. The AI-powered shopping platform also confirmed that it is reviewing transactions, issuing reversals to brand partners for misattributions, and hiring a head of compliance.
Intent Changes the Analysis
The new allegations are generating renewed scrutiny for Phia because they introduce an element that was largely absent from the initial controversy: knowledge and intent. An unintentional attribution error may run afoul of affiliate agreements or platform rules. Knowingly using technology to claim credit – and potentially commissions – for sales a company did not drive raises more serious legal issues, including fraud.
Fraud generally involves intentional deception used to obtain money or something else of value – and cookie stuffing has resulted in criminal fraud convictions before. In 2010, federal prosecutors charged Shawn Hogan with wire fraud in connection with an alleged cookie stuffing scheme involving eBay. Hogan ultimately pleaded guilty and was sentenced to five months in prison in 2014.
The criminal case followed civil litigation brought by eBay in 2008. In that case, eBay sued Hogan, its top affiliate marketer at the time, alleging that he used cookie-stuffing techniques to claim credit – and commissions – for sales he had not generated. (Notably, eBay also alleged in its case that when Hogan was questioned years earlier about suspected cookie stuffing, he attributed the activity to a “coding error” that had been fixed.)
The ongoing litigation involving PayPal-owned Honey further illustrates the potential civil implications in cases over alleged cookie stuffing. In more than 25 related lawsuits consolidated in California federal court, creators, publishers, and affiliate marketers allege that Honey improperly inserted or replaced affiliate identifiers, diverting commissions from parties that initially referred consumers to merchants. PayPal disputes the allegations. Plaintiffs have asserted claims including intentional interference, unjust enrichment, consumer-protection violations, and federal and state computer-access claims. In June, the court denied PayPal’s motion to dismiss the second amended complaint, allowing the claims to proceed without making any determination as to liability.
The new reporting also puts Phia’s earlier explanation under greater scrutiny. It does not establish that Phia – which is not currently subject to litigation over its reported affiliate practices – falsely characterized the issue as stemming from a software release. But Bloomberg’s reporting that the co-founders discussed relevant cookie-dropping functionality months before the issue became public raises questions about how that explanation fits with the newly reported internal communications.
THE BOTTOM LINE: The latest allegations do not establish that Phia committed fraud or otherwise violated the law, but they shift the focus from what Phia’s technology allegedly did to what the company and its executives allegedly knew about how it operated – a distinction that could prove significant if the controversy ever moves from public scrutiny into court.
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