Phia Founders Faced Questions Over Affiliate Features Crediting Sales the App Did Not Drive

Phia co-founders Phoebe Gates and Sophia Kianni pushed for software features that credited the shopping app with sales it did not drive, according to internal communications and people familiar with the company. The allegations center on affiliate attribution, the system Phia uses to earn commissions when its browser extension helps complete a purchase.

Phia markets itself as a personal shopping assistant that finds lower prices, discount codes and fashion products. The dispute concerns whether some features altered the path between a shopper and a retailer, allowing Phia to claim commission after another channel had already influenced or generated the sale. Bloomberg’s reporting formed the basis for coverage by Fortune and other outlets.

The founders were aware of the attribution practice as early as December, roughly 7 months before the company disabled the feature, according to internal Slack messages and people familiar with the matter. That account conflicts with Phia’s public statement on July 8 that it had learned of the issue only “within the last 24 hours.”

The feature was disabled after a July inquiry from Bloomberg, according to Fortune’s account. The company publicly described the change as a response to a bug, while the internal timeline described in the reporting indicates that concerns had circulated for months. Business of Fashion and RuntimeWire echoed the central allegation, although neither provided additional article text in the supplied excerpts.

The disputed feature accounted for about 51% of Phia’s merchandise value in June, according to Fortune. That figure makes the attribution question central to the company’s business model, rather than a narrow engineering defect with limited commercial effect.

Affiliate businesses depend on accurate tracking because retailers pay commissions to the party credited with referring a customer. If software inserts or refreshes an affiliate identifier after a shopper has already found a product or decided to buy, the platform can receive revenue without producing the underlying demand. TechCrunch described the alleged practice as “cookie stuffing,” a term for placing tracking cookies or affiliate markers that claim credit for activity generated elsewhere.

Affiliate attribution determines who gets paid when several services influence an online purchase. A shopping extension can legitimately earn a commission when it supplies a discount, redirects a customer or otherwise contributes to the transaction. The allegations against Phia concern features that assigned credit beyond that contribution.

That distinction affects retailers, competing referral services and investors evaluating Phia’s growth. Merchandise value attributed to the app can make adoption and revenue performance look stronger, while retailers may pay commissions that do not correspond to incremental sales. The issue also places pressure on founders to explain how product decisions, internal controls and public disclosures aligned.

The reported gap between internal awareness and the July public explanation raises governance questions for a startup whose product operates inside the online checkout process. Browser extensions sit close to sensitive commercial activity, so users and retail partners need clear rules governing discounts, tracking and referral credit.

The allegations also put founder decision-making under scrutiny. Internal communications described by Bloomberg and Fortune indicate that Gates and Kianni were involved in pushing features tied to the disputed attribution. The reporting does not establish a regulator’s finding or a final legal judgment, but it frames the matter as a conflict between product incentives and transparent affiliate practices.

Phia faces pressure to explain when it identified the issue, how the feature worked, how much commerce it affected and whether retailers or users were reimbursed. The company also needs to clarify whether the July shutdown covered every related attribution mechanism or only the feature described as a bug.

The outcome will shape confidence among retail partners, shoppers and potential backers. A credible review of tracking logic, clearer disclosures and independent checks on affiliate reporting would address the immediate questions. Continued scrutiny from Bloomberg, Fortune, TechCrunch and other outlets will keep the timeline and financial impact in focus.