A shopping startup co-founded by Bill Gates‘ daughter now sits at the center of a legal storm that could expose her to decades behind bars or a wave of civil lawsuits, according to attorneys who spoke with The Post.
Phoebe Gates, 23, built the AI-powered shopping platform Phia alongside Stanford classmate Sophia Kianni.
The pair launched Phia’s app and browser extension to consumers in April 2025, betting on artificial intelligence to reshape online shopping.
That bet now faces intense scrutiny.
Bloomberg published findings this week alleging that Phia’s browser extension triggered affiliate tracking cookies without shoppers completing the click-through action normally needed for the company to claim a commission.
Industry insiders call this maneuver “cookie stuffing.”
Retail giants Nike, Nordstrom and the Gap all appear among the affiliates allegedly hit by the practice, Bloomberg found.
None of the three retailers has commented publicly since the report surfaced.
Internal Slack messages and source code reviewed by Bloomberg reportedly show Phia’s leadership understood the automatic cookie-placement issue for months before telling the public about the attribution problem.
Phia has contested elements of Bloomberg’s account and denies any criminal wrongdoing has occurred. No charges have been filed against the company or its founders.
Attorney Star Kashman, founding partner of Cyber Law Firm, laid out the criminal stakes bluntly: federal wire fraud statutes cap prison time at 20 years and can carry additional monetary penalties on top of that.
Securing such a conviction, however, demands a high bar of proof.
“This can’t be a careless or negligent error,” Kashman told The Post. “Wire fraud would have to paint a picture of a knowing scheme that is organized to defraud these individuals (affiliates, businesses etc.) of their money.”
Kashman doesn’t expect Gates to see the inside of a prison cell for two decades, even in a worst-case scenario.
Prosecutors rarely pursue maximum sentences against first-time offenders with clean records, she explained, adding that “even with intent, prosecution is never automatic.”
Money, not prison bars, poses the sharper threat to Gates and her company right now, Kashman said. “The more likely penalty here is financial penalties.”
Businesses that can prove Phia’s alleged practices cost them money have grounds to sue over lost commissions, broken contracts and damaged business relationships, Kashman noted.
She said privacy violations and consumer-protection breaches could factor into such claims as well.
“If proven to be true, I see it as a likely possibility that herself and/or her company will be taken to court over this alleged scheme,” she said.
Understanding the stakes requires understanding how affiliate marketing works.
Retailers reward affiliates — websites, apps or extensions that drive traffic — with a commission whenever a shopper clicks their link or applies their coupon and completes a purchase.
A tracking cookie records which affiliate deserves credit for the sale.
Cookie stuffing hijacks that process.
It plants tracking cookies on a shopper’s device without genuine interaction, letting an affiliate falsely claim commissions for sales it never actually influenced.
Ben Edelman, an advertising researcher who scrutinized Phia’s conduct, told The Post he leans toward calling this behavior “forced clicks” rather than cookie stuffing when browser-extension software is involved, though he conceded the terms overlap heavily — the distinction “may be a thin difference.”
Edelman didn’t mince words about the motive behind such tactics.
“There is no proper reason for an extension to invoke an affiliate link, and place an affiliate cookie, when the user hasn’t meaningfully interacted with it,” he wrote in an email. “But there is an obvious improper reason — to get paid more (a lot more).”
He went further, branding forced clicks “the most fundamental breach of network and merchant rules” — a tactic capable of inflating affiliate earnings while simultaneously driving up costs for the merchants footing the bill.
Richard Newman, a performance-marketing attorney with more than 20 years of industry experience, confirmed that affiliate agreements typically forbid cookie stuffing outright.
“Cookie stuffing is … usually a method by which to invalidate commissions,” he told The Post.
Newman framed most of these disputes as private contractual battles rather than criminal matters, even as Gates confronts the possibility of far graver consequences should fraud be proven. Affiliates caught violating the rules simply forfeit their earnings, he said: “They lose their commissions.”
Phia’s bottom line has already taken a visible hit.
Bloomberg reported that the company’s average daily revenue collapsed from around $80,000 to a range of just $10,000 to $28,000 once the disputed cookie features were shut off.
Phia disputes that the feature change alone explains the drop, pointing instead to its own decision to pull back on most monetization efforts around the same time.
As of now, neither Gates nor Phia faces formal charges, and the retailers named in the allegations have stayed silent — leaving the scandal’s ultimate legal outcome very much unresolved.
