Phia, a shopping startup co-founded by Phoebe Gates and Sophia Kianni, reportedly knew about its cookie stuffing affiliate practices as far back as December, according to leaked Slack messages and sources cited by Bloomberg.

Cookie stuffing is a practice where affiliate platforms take credit and commission for purchases they did not help generate. Although a Phia spokesperson previously claimed the company only learned of the issue when contacted by reporters, Bloomberg reports the practice was a purposefully built feature that could be switched on and off, with Gates and Kianni discussing it with executives and engineers.

The activity made up a significant portion of Phia's sales, causing a sizable drop in daily revenue once stopped. Affected retailers included major brands such as Nike and Nordstrom.

In a statement to TechCrunch, an unnamed Phia spokesperson said, "Any features causing misattributions were immediately removed over a month ago on July 7. We are reviewing every transaction, we are fully committed to and have already begun issuing all transaction reversals to brand partners as a result of any misattribution, and we are hiring a head of compliance to make sure something like this never happens again." The spokesperson added that the startup would learn from the incident.

Phia originally launched last April as a price-comparison shopping platform similar to Google Flights. The business has faced several ongoing controversies and challenges, including:

• Staff Reduction: A July report by Puck revealed Phia lost nearly half of its full-time workforce since the start of the year.
• Listed Brands: Multiple brands were listed on the app without their knowledge.
• Investor Pushback: Investors expressed concern over how aggressively the company leaned into affiliate marketing.
• Data Collection: The startup previously faced scrutiny for secretly tracking user behavior web-wide and transmitting sensitive data to its servers.