The practice of cookie stuffing allows a platform to claim commissions on sales it did not generate, effectively siphoning revenue from other affiliate marketers. While Phia previously characterized the activity as an accidental bug, internal Slack messages suggest the functionality was a deliberate feature that could be toggled on and off. The company’s revenue saw a significant decline immediately after the practice was discontinued, underscoring its role in the firm’s financial performance. Affected retailers identified in the reports include major brands such as Nike and Nordstrom.
In section Startups & Technology
Internal messages contradict Phia founders’ claims on affiliate practices
Phoebe Gates and Sophia Kianni were aware that their startup, Phia, engaged in deceptive affiliate marketing tactics months before the practice became public knowledge. Leaked internal communications reveal that the founders discussed the controversial technique, known as cookie stuffing, with their staff as early as last December.
Beyond the affiliate controversy, the startup has faced mounting instability throughout the year. Data indicates that Phia has lost roughly half of its full-time workforce since January. Reports also highlight concerns from investors regarding the company's aggressive marketing strategies and previous findings that the application was tracking user behavior across the web to harvest sensitive data. When confronted with the latest evidence, a company spokesperson stated that the firm intends to learn from these challenges while disputing specific elements of the reporting.
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