Bill Gates' daughter faces scrutiny over startup affiliate tracking controversy

Phoebe Gates, daughter of Microsoft co-founder Bill Gates, is under growing scrutiny over Phia, the shopping startup she launched with Sophia Kianni. The company is now facing questions about when its leaders first learned that their software was collecting commissions for sales it did not actually drive.

Phia is a shopping platform designed to help users find products and earn money through affiliate marketing. The company gets a commission when someone clicks a Phia link and makes a purchase.

But in July, independent affiliate marketing researcher Ben Edelman released a technical report showing that Phia’s browser extension was involved in a practice known as “cookie stuffing.”

Edelman’s tests found that the software placed affiliate tracking codes on users’ devices even if they had not clicked a Phia link. This allowed Phia to claim commissions for purchases it did not actually influence.

After Bloomberg reported these findings in July, Phia said the problem was caused by a recent software update and removed the disputed features on July 7.

The company also pledged to review its data, correct any misattributed transactions, and appoint a compliance executive to oversee its operations going forward.

That explanation is now being challenged. New reports published on August 11 point to internal Slack messages suggesting that Gates and Kianni knew about the tracking feature as far back as December 2025.

This directly conflicts with the company’s earlier statement that the issue was a recent technical error, and raises new questions about what the founders knew and when.

The controversy has fueled online speculation regarding possible criminal liability, including federal wire fraud, which can carry severe penalties. However, Gates has not been charged with any crime, and there is no public sign that federal authorities are investigating.

Legal experts note that establishing criminal fraud would require prosecutors to prove an intentional scheme to defraud, a high legal bar.

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For now, the consequences are commercial. Impact.com, a major affiliate marketing platform, has suspended Phia in response to the allegations, dealing a major setback to the startup’s main business.

Looking ahead, Phia could face civil claims or demands for repayment from retailers and affiliate networks if sales were wrongly attributed, putting the young company in a difficult position.