Phoebe Gates, the daughter of Microsoft founder and billionaire tech mogul Bill Gates, has been accused of "cookie stuffing" at her multi-million-dollar startup, Phia. Cookie stuffing is a form of digital fraud in which tracking files are placed onto a person's web browser without their consent, and carries a maximum penalty of 20 years in prison.
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Star Kashman, founding partner of Cyber Law Firm, told the New York Post that prosecutors would have to prove that Gates knowingly participated in the scheme for a two-decade prison penalty to stick.
"This can't be a careless or negligent error," she told The Post.
"Wire fraud would have to paint a picture of a knowing scheme that is organized to defraud these individuals (affiliates, businesses etc.) of their money."
Still, even if the "nepo baby" does avoid jail time, she could face a series of civil lawsuits. The second-generation tech mogul could also be ordered to pay several fines.
"The more likely penalty here is financial penalties," she said.
Phoebe Gates, Phia Accused of Cookie Stuffing
Phia is an AI shopping assistant that compares prices for luxury fashion items. By scouring the web, the company finds the lowest price possible for a secondhand listing.
The company was founded in 2023 and boasts Sydney Sweeney and Hailey Bieber as celebrity investors.
Since July, Phia has dealt with the fallout of a Bloomberg investigation that found the company had been embedding its tracking code in shopping links supplied by competitors. This practice, known as "cookie stuffing," credited Phia with sales that rightfully belonged to its competitors.
A second Bloomberg investigation this week found that Gates and co-founder Sophia Kianni were aware of the false commissions. Not only that, but they allegedly condoned the practice, according to Bloomberg.
Now, the pair of co-founders are in hot water and face up to two decades in prison.
"I see it as a likely possibility that she and/or her company will be taken to court," Kashman said.
Bloomberg reported that Phia's average revenue plunged after the disputed features were disabled. The AI shopping tool's daily revenue dropped from roughly $80,000 to between $10,000 and $28,000, per the outlet.
Phia disputed aspects of Bloomberg's findings and has not been charged with a crime.
