Bill Gates' 23-year-old daughter faces accusations that her shopping startup secretly claimed credit for online sales it had nothing to do with, a practice one attorney says amounts to federal wire fraud.

A new Bloomberg investigation found that Phoebe Gates and her co-founder Sophia Kianni, both Stanford graduates, knew for at least seven months that their browser-extension startup Phia was dropping affiliate tracking cookies into customers' checkout sessions even when those customers never used a Phia coupon. The practice, known as "cookie stuffing," let Phia take credit for sales at major retailers like Nike, Gap, and Nordstrom, and pocket commissions it never earned. Internal Slack messages reviewed by Bloomberg show both founders were not only aware of the scheme but actively managed it.

Gates wrote to developers on December 18 in a Slack message that left little room for ambiguity. The New York Post reported the contents of that message:

"worried this is an issue across the board...can u confirm auto pop for cookie drop is live on ALL sites w a coupon to confirm we are monetizing on all gmv."

That message, sent months before Phia would publicly call the cookie drops a "glitch", shows Gates pressing her team to confirm the feature was running across every partner site. "GMV" refers to gross merchandise value, meaning the total dollar amount of sales Phia wanted to claim credit for.

Kianni, for her part, pushed even further. She suggested a feature that would drop a cookie every time a user tried to close a Phia pop-up window, essentially hijacking the dismiss button to generate commissions. When a colleague warned her that Google Chrome's policies prohibit extensions from dropping affiliate cookies on "dismiss events," Kianni's response was telling:

"I guess we could say that the user is trying to open us and roll it back if they complain."

A Phia spokesperson told Bloomberg that the dismiss-event feature was never implemented. That claim has not been independently verified.

By June, half of Phia's claimed sales came from cookie stuffing

The scale of the alleged scheme grew steadily. By June, cookie stuffing accounted for roughly 51 percent of the merchandise value Phia claimed credit for selling. The startup was running on inflated numbers, and the commissions that came with them.

When reports surfaced in July that Phia was dropping far more cookies than it should, the company's initial public response was that it had only learned of the problem "within the last 24 hours" and pledged to fix what it called a glitch. Bloomberg's reporting directly contradicts that timeline. The internal Slack messages date the founders' awareness to at least December, seven months earlier.

What Phia initially labeled a software bug turned out to be a feature called "enable coupon auto drop," visible on an internal dashboard Bloomberg reviewed. The company could switch it on and off at will. That distinction matters: a bug is an accident; a toggle is a decision.

Phia disabled the features on July 7. The financial impact was immediate and severe. Average daily revenue dropped from approximately $80,000 to somewhere between $10,000 and $28,000. A Phia spokesperson attributed part of the steep decline to the company disabling most of its monetization efforts at the time, not just the cookie-stuffing mechanism, and said Bloomberg's analysis of the revenue data was overstated.

Impact.com, the affiliate network Phia used to connect with retailers, suspended the startup's account and reallocated commissions that had been set aside for Phia. The retailers, brands that trusted Phia to send them real customers, were left sorting out which sales were legitimate and which were falsely claimed.

Attorney warns cookie stuffing is typically prosecuted as federal wire fraud

Attorney Ariel Givner, founder of Givner Law, posted a warning on X about the legal exposure Phia's founders now face. Her assessment was blunt:

"It's typically treated as federal wire fraud in US courts. There's a possibility of a max penalty of up to 20 years prison + fines/restitution."

No criminal charges have been filed, and no government investigation has been publicly announced. But the legal framework Givner outlined is well-established. Federal wire fraud, using electronic communications to carry out a scheme to defraud, is one of the most commonly charged white-collar offenses in the federal system. The statute covers conduct that crosses state lines through the internet, which a browser extension operating across national retail sites plainly does.

The case carries echoes of other high-profile episodes in which young, well-connected figures faced serious legal consequences for conduct at their own ventures. A federal appeals court recently upheld Sam Bankman-Fried's fraud conviction, reinforcing that celebrity status and elite pedigree offer no shield when the evidence points to deliberate deception.

$30 million in celebrity backing, and a story about proving herself

Phia raised $30 million in 2025 from a roster of celebrity investors that included Hailey Bieber, Kris Jenner, and Spanx founder Sara Blakely. The funding round gave the startup credibility and visibility that most first-time founders can only dream of, advantages that flowed directly from Gates' last name and the social circles it opens.

Phoebe Gates, now 23, has previously said she "wanted to succeed without her billionaire parents' help" and that she has "such a desire to prove myself." Her father, Microsoft co-founder Bill Gates, has a net worth of $108.4 billion, according to Forbes. The gap between that stated ambition and the conduct Bloomberg's reporting describes is difficult to square.

Building a legitimate business is hard. Earning commissions on sales you had nothing to do with is not building a business, it is taking money that belongs to someone else. The internal messages suggest this was not a matter of ignorance or a rogue engineer. Gates asked her team to confirm the cookie drops were live. Kianni proposed expanding them. When warned about platform rules, Kianni's instinct was to find a workaround and "roll it back if they complain."

Accountability in cases like these often depends on whether the individuals involved have the kind of connections that insulate them from consequences. Investigations into fraud, whether in voter fraud probes or corporate misconduct, tend to move slowly when powerful names are attached.

Phia promises compliance reforms after the damage is done

In its statement to the Post, Phia acknowledged the problem while framing it as resolved. A spokesperson said:

"Any features causing misattributions were immediately removed over a month ago on July 7. We are reviewing every transaction, we are fully committed to and have already begun issuing all transaction reversals to brand partners as a result of any misattribution, and we are hiring a head of compliance to make sure something like this never happens again."

The spokesperson added that Phia is "continuing to connect our users with items and offers from thousands of brand partners" and plans to roll out new features including a digital closet.

The statement raises as many questions as it answers. Phia says it is issuing transaction reversals, but the total dollar value of commissions collected through the alleged cookie stuffing remains undisclosed. The scope of Impact.com's suspension, whether temporary or permanent, is unclear. And the company has not explained why its initial public response in July claimed the problem was discovered "within the last 24 hours" when internal records show the founders discussed the cookie-drop features months earlier.

Hiring a compliance officer after the scheme has already been exposed and the affiliate network has already cut you off is not a sign of corporate responsibility. It is damage control. The question now is whether federal prosecutors or regulators see enough in Bloomberg's reporting to open a formal inquiry, and whether the Gates name accelerates that process or slows it down.

Washington is full of well-connected figures who navigate institutional pressure with the help of elite legal and political networks. The revolving door between government offices and powerful firms is a familiar feature of American life. Whether Phoebe Gates faces real accountability or quietly settles and moves on will say a great deal about whether the system treats billionaires' children the same way it treats everyone else.

The facts are on the record. The Slack messages are in black and white. The only question left is whether anyone with a badge and a subpoena cares enough to follow them.