Clean up on aisle Phia.
The shopping startup cofounded by Bill Gates’ 23-year-old daughter, Phoebe, is doing damage control after a bombshell Bloomberg report revealed it had been earning commissions on sales it didn’t help drive.
Phia is working with at least one affiliate network, Impact.com, to refund affected parties and correct attributions, an email viewed by Business Insider shows.
A Phia spokesperson confirmed that the company has offered transaction reversals to brands.
Phia’s basic premise is that it can help shoppers find discounts on clothes and other items. The startup makes money by taking a cut of the sales it drives to brands, processed through affiliate networks that act as intermediaries by tracking commissions and facilitating payments. Phia publicly acknowledged this month that its browser extension had also been claiming credit for sales it had no part in, an issue it blamed on a software update and said that its team had resolved.
That revelation sent a shock wave through the e-commerce world, as brands and agencies scrambled to determine whether they had been affected and potentially lost money.
Impact.com said in an email to an affiliate agency on Wednesday that, as a result of its review, it was “working with Phia to determine solutions for you, and our publishers & creators that may have had an inequitable result due to Phia’s products and services.”
“We’re reprocessing all actions credited to Phia between June 20 and July 29 that had not yet been paid out,” Impact.com said in a statement to Business Insider. “These actions are being reattributed to the appropriate publisher, or refunded to the advertisers, depending on each situation. The June 20 to July 29 window represents the period when Phia’s activity was under review but the associated commissions hadn’t yet been disbursed.”
Impact.com didn’t address what would happen with payments made to Phia before June 20. Ben Edelman, an independent researcher who studied Phia’s code and helped surface the problem, told Business Insider he’d observed the attribution issue occurring for months.
The Phia spokesperson said that from July 29 on, its active brand partnerships through Impact.com had resumed functioning normally. Phia has, however, been temporarily suspended from Impact.com’s marketplace, where new brand deals are made, and needs to demonstrate a period of compliance before it can be reinstated.
Rakuten Advertising, another major affiliate network, told Business Insider it is actively investigating the situation.
The network CJ Affiliate told publishers and partners last week that it was providing “reconciliation payments” to correct tracking mistakes, according to an email viewed by Business Insider. The email did not name Phia, and CJ Affiliate did not respond to requests for comment.
Correct attribution is a core issue in affiliate marketing, and this incident is a major blow to high-flying Phia, which launched its app in 2025 and has raised $43.5 million from investors ranging from VC heavyweights like Kleiner Perkins and Khosla Ventures to celebrities including Hailey Bieber.
“It could greatly damage their trust and reputation in the industry,” Jordan Williams, the CEO of attribution fraud prevention company Veeper, told Business Insider. He added that he’s received an influx of outreach from brands and agencies since Phia’s attribution problems became public.
Gates and her cofounder, Sophia Kianni, who use their social platforms to promote Phia — and have a popular podcast called “The Burnouts” — have not publicly addressed the issue.
Cristin Culver, a tech startup communications consultant, said that was a strategic misstep.
“They have these avenues in which they are very out there, and very vocal and very willing to speak,” she told Business Insider. “But then, when it comes to the core of their business and whether or not people can trust them, they’re not speaking.”
Do you have a story to share or a tip about Phia? Contact these reporters at mberg@businessinsider.com or sbradley@businessinsider.com, or on Signal @MadelineBerg.44 or @sydneykbradley.123.
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