Start-up of Bill Gates's daughter claimed sales it didn't drive
What's the story
Phia, an advertising start-up co-founded by Phoebe Gates, the daughter of Microsoft co-founder Bill Gates, has been accused of violating affiliate marketing policies. Its browser extension allegedly claimed sales it didn't actually drive by injecting its own referral codes. Independent researchers and competitors such as Capital One Shopping flagged these concerning practices. Phia has acknowledged the issue and said it has been fixed.
App operations
Extension accused of claiming credit for sales it didn't drive
Phia, which calls itself a "personal shopping assistant," helps users find the best deals on clothes and fashion accessories. The app works by finding discount codes for products during online shopping. However, independent researcher and consultant Ben Edelman and Capital One Shopping have accused Phia of claiming credit for sales it didn't drive, violating many digital platforms' policies.
Code manipulation
Phia's extension opened a background tab to inject referral codes
Bloomberg tested the Phia mobile browser extension on over 50 websites and discovered that during checkout, it opened a background tab without user interaction. The tab injected its own referral code, overriding legitimate referrals from other publishers. This was in line with Capital One Shopping and Edelman's independent testing and code review findings.
Policy breach
Affiliate marketing rules state commissions only paid on real clicks
Edelman, who has spent decades exposing what he says are deceptive practices in digital advertising, said the most fundamental requirement in affiliate marketing is that commission is only paid if a user clicks. He added, "The rules don't allow fake clicks, simulated clicks, imaginary clicks or hypothetical clicks. Only a real click will do." Capital One Shopping also flagged similar concerns about Phia's alleged fake clicks or "cookie stuffing."
Company response
Phia has fixed the issue
A Phia spokesperson acknowledged the issue and said it has been fixed. "Within the last 24 hours, we were made aware that in a recent release our codebase was causing misattributions from a subset of users," the spokesperson said. "As soon as we were notified, our team worked overnight to identify, mitigate, and has since resolved the issue."
Code replacement
Phia's extension replaced another referrer's unique code with its own
Phia's extension was found replacing another referrer's unique code with its own, allowing it to claim a commission for sales it didn't meaningfully influence. This practice also violated industry rules against cookie stuffing or taking credit for other referrers' sales. Impact.com suspended Phia's account after detecting behavior in its extension inconsistent with platform policies, and is reviewing potentially impacted transactions to determine what corrective actions, if any, are needed.