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Phia, the shopping startup co-founded by Phoebe Gates and Sophia Kianni, is once again under fire for its alleged business practices. The latest issue stems from earlier this year when Bloomberg published an investigation<\/a> that mapped out how Phia was taking credit and commission for affiliate purchases it did not help to generate, known as cookie stuffing.\u00a0<\/p>\n It\u2019s a controversial practice that can get startups sued, mainly because it\u2019s seen as taking referral revenue away from other affiliate marketers. Usually, when affiliate platforms like Phia sign on to work in a marketplace, they sign a contract stating that cookie stuffing is banned because it\u2019s unfair.\u00a0<\/p>\n When Bloomberg first reported on Phia\u2019s cookie stuffing, a Phia spokesperson told the publication that the company was only made aware of the issue when Bloomberg reached out to them. <\/p>\n But new reporting by Bloomberg shows<\/a> that Gates and Kianni knew their startup was cookie stuffing as far back as December, based on leaked Slacks and sources familiar with the matter speaking to the publication.<\/p>\n The latest reporting found that cookie stuffing made up a good chunk of Phia\u2019s sales and the company saw a sizable drop in daily revenue once it stopped the practice. The outlet also gained insight into the affected retailers, including Nike and Nordstrom. <\/p>\n Back in early July, a Phia spokesperson referred to the cookie stuffing as a bug, but Bloomberg now reports that this was a purposefully built feature that could be switched on and off. The leaked Slack messages also show Gates and Kianni talking about cookie stuffing practices with other executives and engineers.\u00a0<\/p>\n Regarding the new allegations, a Phia spokesperson told Bloomberg that it rebuffed some of the publication\u2019s claims, but said the company would \u201clearn from this.\u201d\u00a0<\/p>\n Phia did not immediately respond to TechCrunch\u2019s request for comment.<\/p>\n Phia launched last April with the promise to be a more effective Google Flights-like site for shopping \u2014 helping users find the best prices across various retailers. <\/p>\n A few days after Bloomberg\u2019s investigation in July, Puck also dug around and found<\/a> that Phia lost almost half its full-time employees since the beginning of the year; that several brands were unaware that they were listed on the app; and that investors got the ick from how aggressively Phia was leaning into affiliate marketing. It\u2019s also faced controversy in the past, like about how it was secretly collecting swaths<\/a> of sensitive data, including tracking user behavior across the web and sending it back to their servers.\u00a0<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n