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An online shopping app co-founded by Bill Gates’ daughter is under scrutiny over claims that it collected money from sales it may have had nothing to do with.
Phoebe Gates, 23, and her business partner, Sophia Kianni, created Phia, an AI-powered shopping assistant that helps people find products and discount codes online.
The way it makes money is fairly simple. If a shopper uses a Phia discount code before buying something, the retailer pays the company a small commission for helping secure the sale.
But Bloomberg reports that Phia’s software sometimes marked a purchase as its own even when the shopper did not use a Phia code. The app could then receive a commission simply because its browser extension appeared on the screen during checkout.
Think of it as someone standing near a shop’s entrance and demanding a finder’s fee for every customer who walks in, even if that customer was already planning to buy something.
This online practice is commonly called “cookie stuffing,” referring to the small tracking files websites use to identify where customers came from.
Phia said in July that it had only recently discovered the problem and described it as a software issue. Bloomberg, however, reported that the company’s founders had known for months about features that automatically placed tracking cookies during purchases.
The amount of money involved appears significant. Phia’s average daily revenue reportedly dropped from about $80,000 to between $10,000 and $28,000 after the disputed features were switched off.
The company said the fall was not caused solely by the cookie issue, as it had also paused other ways of earning money.
Phia says it removed the features on July 7 and is now checking every transaction. It has begun returning commissions to retail partners and plans to hire a senior compliance officer to prevent a repeat.
The company disputes parts of Bloomberg’s findings and says one feature discussed by staff was never introduced.
Although cookie stuffing can result in serious criminal charges in the United States, neither Gates nor Kianni has been charged with a crime.
*Source: New York Post
