Phoebe Gates, the 23-year-old daughter of Microsoft co-founder Bill Gates, built her AI shopping app Phia on a promise: help users find discount codes while shopping online, and earn a small commission from retailers for driving sales. But a new investigation from Bloomberg alleges that the app may have been claiming credit for sales it never actually generated — by faking clicks.
How Phia allegedly faked clicks to claim commissions
According to the Bloomberg report, Phia’s browser extension was programmed to automatically trigger clicks on affiliate links — even when a user had not actively clicked on a product or completed a purchase. This practice, known in the industry as “click fraud,” allowed the app to claim affiliate commissions from retailers like Amazon, Walmart, and Target for transactions it did not drive.
The investigation found that Phia’s code would fire affiliate tracking links in the background as users browsed the web, effectively taking credit for sales that would have happened anyway. Retailers, unaware of the fake clicks, paid Phia commissions they would not have owed under normal circumstances.
Why this matters for shoppers and retailers
For everyday users, the controversy raises a troubling question: was the app helping them save money, or was it quietly siphoning money from retailers under false pretenses? If Phia’s claims are true, retailers have been overpaying for traffic they never received — costs that could eventually be passed on to consumers through higher prices.
For the affiliate marketing industry, which relies on trust between publishers, networks, and merchants, the allegations threaten to undermine confidence in the entire system. “If a major player like Phia is caught gaming the system, it could trigger stricter verification requirements for all affiliates,” a digital marketing analyst told reporters.
The timeline of Phia’s rise and fall
Phia launched in early 2025 with significant fanfare, partly due to Phoebe Gates’ family name and her co-founder Sophia Kianni, a well-known climate activist. The app quickly raised $6 million in seed funding at a $61 million valuation, with investors betting on the growing trend of AI-powered shopping assistants.
By mid-2025, Phia had amassed over 500,000 users and partnered with dozens of major retailers. But behind the scenes, Bloomberg’s investigation suggests the app’s growth was built on a shaky foundation. The report claims that internal data showed a suspiciously high ratio of clicks to actual purchases — a red flag that should have been caught earlier.
Who is affected by the Phia controversy
The most directly affected are the retailers who paid Phia commissions for sales they did not drive. Small and medium-sized businesses, which often operate on thin margins, may have been hit hardest. Additionally, users who downloaded Phia in good faith may feel betrayed, especially those who shared personal shopping data with the app.
Phoebe Gates herself faces a reputational hit. As the daughter of one of the world’s most famous philanthropists, she has tried to build her own identity as a tech entrepreneur and advocate for women in STEM. This scandal could overshadow those efforts and raise questions about her judgment and the culture at her startup.
What Phoebe Gates and Phia have said
As of now, neither Phoebe Gates nor Sophia Kianni have issued a public statement regarding the Bloomberg report. Phia’s official social media accounts have remained silent, and the company has not responded to requests for comment from multiple news outlets.
Bloomberg’s investigation relied on interviews with former employees, leaked internal documents, and analysis of the app’s code. The report also cites affiliate network partners who said they had flagged unusual click patterns to Phia months ago but received no meaningful response.
Why the fake click scheme worked — and how it was caught
Affiliate marketing works on a simple model: a publisher (like Phia) gets a unique tracking link for each retailer. When a user clicks that link and makes a purchase within a set time window, the publisher earns a commission. Phia allegedly exploited this by triggering its own tracking links automatically, without user action.
The scheme was caught when retailers and affiliate networks noticed that Phia’s click-through rates were abnormally high compared to its conversion rates. “It’s like a store claiming 1,000 people walked in but only one person bought something — that doesn’t add up,” a fraud detection expert explained. Bloomberg’s technical analysis confirmed that the app’s code contained functions designed to fire affiliate links in hidden browser tabs.
Confirmed facts vs what remains unclear
Confirmed: Bloomberg’s investigation found evidence that Phia’s code could automatically trigger affiliate links. Multiple former employees confirmed the practice was discussed internally. Affiliate network partners reported suspicious click patterns months ago.
Unclear: Whether Phoebe Gates or Sophia Kianni personally authorized the practice. How much unearned commission Phia actually collected. Whether the company will face legal action from retailers or regulators. The full extent of the fake clicks — Bloomberg’s analysis covered a sample period, not the app’s entire history.
Why Phia’s business model matters
Phia’s value proposition was simple: users install a browser extension, and it automatically applies discount codes at checkout. The app earned money by taking a cut of the affiliate commission from the retailer. This model depends entirely on trust — retailers trust that Phia is driving real sales, and users trust that the app is not doing anything shady in the background.
The fake click allegations strike at the heart of that trust. If Phia was claiming commissions for sales it didn’t drive, the entire business model is built on fraud. Even if the practice was limited to a small number of transactions, the reputational damage could be fatal for a startup that relies on partnerships with major retailers.
Risks and balanced view
It is important to note that Bloomberg’s findings are based on an investigation, not a court ruling. Phia has not been found guilty of any crime, and the company may have a defense — perhaps the automatic clicks were a bug, not a feature, or the result of third-party code they were unaware of.
However, the evidence presented is substantial. Former employees, internal documents, and code analysis all point to a deliberate pattern. Critics argue that even if the founders were not directly involved, they bear responsibility for the culture and oversight at their company. “When you’re the CEO, the buck stops with you,” a startup governance expert said.
Wider trend: AI shopping apps and affiliate fraud
Phia is not the first AI shopping app to face fraud allegations, but it is the highest-profile one. The rise of browser extensions and AI-powered shopping assistants has created new opportunities for abuse. Many apps operate in a regulatory gray area, with little oversight from affiliate networks or retailers.
Industry insiders say that fake clicks and other forms of affiliate fraud cost retailers billions of dollars annually. The Phia case could be a watershed moment, forcing the industry to adopt stricter verification standards, such as requiring proof of user interaction before paying commissions.
What users and retailers should do now
If you have Phia installed on your browser, consider removing it until the company provides a clear explanation. Check your recent purchases to see if any were made through Phia’s affiliate links — though this may be difficult to verify without the app’s data.
For retailers who partnered with Phia, the immediate step is to audit all commissions paid to the app and demand a refund for any unearned amounts. Legal action may follow if the fraud is proven to be intentional.
Future outlook
The next few weeks will be critical for Phia. If the company fails to provide a credible defense, it could lose its retail partnerships, face lawsuits, and see its valuation collapse. Investors may demand their money back or force a leadership change.
For Phoebe Gates, the scandal could define her early career. She has the resources and connections to weather the storm, but rebuilding trust will take years. The broader AI shopping app industry will also be watching closely — regulators and affiliate networks are likely to tighten rules in response.
Our Take
The Phia story is a cautionary tale about the pressures of startup growth and the dangers of cutting corners. Whether or not the founders were directly involved, the allegations point to a culture where metrics mattered more than ethics. For consumers, it’s a reminder that not every shiny new app is what it seems — especially when money is changing hands in the background. The real test for Phoebe Gates will be how she responds: with transparency and accountability, or with silence and spin.
Frequently Asked Questions
What is Phia and who founded it?
Phia is an AI-powered shopping browser extension co-founded by Phoebe Gates (daughter of Bill Gates) and Sophia Kianni. It helps users find discount codes while shopping online and earns commissions from retailers for driving sales.
What did the Bloomberg investigation find about Phia?
Bloomberg reported that Phia’s code could automatically trigger affiliate tracking links without user action, allowing the app to claim credit for sales it did not actually drive. This practice is known as click fraud.
Has Phoebe Gates responded to the allegations?
As of now, neither Phoebe Gates nor her co-founder Sophia Kianni have publicly commented on the Bloomberg report. Phia has not issued a formal statement.
What could happen to Phia next?
Phia could face legal action from retailers, loss of partnerships, and reputational damage. The controversy may also lead to stricter regulations for AI shopping apps and affiliate marketing practices.
