Microsoft founder Bill Gates’s daughter Phoebe Gates has landed in legal troubles after it was alleged that her shopping startup was using a controversial “cookie stuffing” scheme to claim credit for online sales it allegedly did not generate.
This practice could potentially lead to federal wire fraud charges carrying a maximum sentence of 20 years in prison.
According to New York Post, the 23-year-old daughter of the tech billionaire co-founded the AI-powered shopping startup Phia with entrepreneur Sophia Kianni.
The company operates a browser extension that helps users find cheaper products, compare prices and apply discount codes while shopping online.
The controversy began after an investigation found that Phia’s browser extension allegedly inserted its own affiliate tracking code during online checkouts even when users had not interacted with the extension.
This could allow the company to claim commissions for purchases that were actually generated by other sources.
The practice is known as “cookie stuffing,” where an affiliate places tracking information on a user’s browser without meaningful interaction so it can potentially receive credit for a sale.
Earlier, Phia described the problem as a software issue and said it had been fixed after the company was alerted to the behavior.
However, a new Bloomberg report citing internal communications alleges that Gates and Kianni had discussed the feature months before the issue became public.
According to the latest reports, Phia had a feature called “enable coupon auto drop” that could automatically place affiliate cookies on users’ browsers.
The feature was reportedly active for at least seven months and was allegedly used to claim commissions from sales involving major retailers including Nike and Nordstrom.
The situation reportedly changed after the feature was removed in July, with Phia’s revenue dropping sharply afterward.
The company has said it plans to reverse transactions that were incorrectly attributed to Phia and has brought in additional compliance measures.
