Phoebe Gates, the youngest daughter of Microsoft co-founder Bill Gates, launched a shopping app called Phia in 2023. The app promised to help users find the best prices across retailers by using a browser extension that automatically applies coupons and compares deals. But a recent investigation by Bloomberg has revealed that the extension was engaging in a controversial practice known as commission hijacking — secretly injecting its own referral codes into transactions to claim commissions for sales it did not meaningfully influence.
According to Bloomberg, the Phia browser extension was observed opening a background tab without any user interaction during the checkout process on more than 50 websites. This hidden tab would then overwrite any legitimate referral codes from other publishers, bloggers, or cashback sites that the user might have already clicked. By doing so, Phia effectively stole affiliate commissions that rightfully belonged to other content creators or affiliates.
How affiliate marketing normally works
Affiliate marketing is a multi-billion dollar industry where publishers, influencers, and websites earn a commission by promoting products and driving sales. When a user clicks a special referral link, a cookie is placed in their browser that tracks the referral source. If the user later makes a purchase, the affiliate gets a cut of the sale — typically between 1% and 20% depending on the merchant and category. This system relies on trust and transparency: the user is aware (often through a small piece of text) that the link may be an affiliate link, and the retailer honors the last-click referral as the source of the sale.
However, some browser extensions and apps have found ways to hijack these cookies by injecting their own referral codes at the very end of the checkout process. This practice is widely considered unethical and, in some cases, violates the terms of service of affiliate programs. It also deprives legitimate content creators of income they have earned through their marketing efforts.
Bloomberg’s investigation
Bloomberg’s team tested the Phia extension extensively across a wide range of e-commerce sites, including major retailers such as Amazon, Nike, and Best Buy. They found that during checkout, Phia would open a hidden browser tab that loaded a page with its own referral parameters. This action would overwrite any existing affiliate cookie, effectively diverting the commission to Phia. The user was often unaware this was happening, as the background tab was invisible and did not interfere with the user’s workflow.
The investigation also noted that Phia’s behavior seemed to be intentional. The extension appeared to wait until the last moment before the purchase was completed to inject its code, increasing the likelihood of overwriting any previous referrals. In some cases, Phia’s code even triggered multiple background tabs, potentially generating several false referral events.
Phia’s response
When contacted by Bloomberg, Phia acknowledged the issue and stated that it “has since resolved the issue.” However, the company did not provide details on how the problem was fixed or whether any commissions had been returned to the rightful affiliates. The statement also did not address how long the hijacking had been occurring or how many transactions were affected.
This is not the first time a shopping app has been accused of questionable affiliate practices. Similar scandals have involved other popular extensions like Honey (owned by PayPal) and Rakuten, which have faced lawsuits or investigations for allegedly altering affiliate cookies without proper disclosure. The industry has struggled to self-regulate, with some players pushing for stricter guidelines and better transparency.
Background on Phoebe Gates and Phia
Phoebe Gates, born in 2002, is the youngest of Bill Gates’ three children. She has largely stayed out of the public spotlight compared to her older siblings, but she began making waves in the tech and fashion scenes during her time at Stanford University. She founded Phia in 2023 with the aim of making online shopping more efficient and affordable. The app quickly gained attention due to her family name and its sleek interface. Phia raised several million dollars in seed funding from venture capital firms, and it positioned itself as a trustworthy alternative to other coupon apps.
The app’s primary feature is a browser extension that automatically tests coupon codes at checkout and compares prices across multiple retailers. Users can also manually search for products and see which sites offer the best deals. Phia claimed to have over a million users within its first year, a growth rate partly fueled by influencer partnerships and social media marketing.
Implications for consumers and the e-commerce ecosystem
The revelation of commission hijacking by Phia raises several concerns. For consumers, the practice is deceptive because they may believe they are supporting a particular publisher or charity when they use a referral link, only to have that credit stolen by an unseen extension. This can erode trust in both the extension and the broader affiliate marketing system.
For small publishers and independent content creators, the financial impact can be significant. Many bloggers, YouTubers, and review sites rely heavily on affiliate income to sustain their work. If a large app like Phia systematically siphons off commissions, it could reduce the incentive for independent creators to produce honest reviews and deal content. This ultimately harms the consumer, who may have fewer high-quality sources of information.
Additionally, e-commerce retailers may also be affected. While retailers pay the same commission regardless of who receives it, they rely on accurate tracking to measure the effectiveness of their marketing partnerships. Hijacked commissions distort these metrics and can lead to poor business decisions.
Legal and ethical considerations
Although commission hijacking is not always illegal — especially if the extension’s terms of service allow it — it often violates the terms of merchant affiliate programs. Many retailers explicitly prohibit the use of “last-click hijacking” or any automated method of overwriting referral cookies. If retailers enforce these terms, they could ban Phia from their affiliate programs or even take legal action.
From an ethical standpoint, the practice is problematic because it violates the principle of informed consent. Users are not told that their clicks on affiliate links may be overridden, nor are they given a choice to prevent it. Even if the extension discloses its behavior in a privacy policy or terms of service (which most users never read), it is still considered a dark pattern — a design that tricks users into actions they did not intend.
Regulators in the United States and Europe are increasingly scrutinizing such practices. The Federal Trade Commission (FTC) has taken action against companies that engage in deceptive affiliate marketing, though enforcement has been inconsistent. The lack of clear regulation leaves it up to platforms and retailers to police themselves, which often results in slow or inadequate responses.
What users can do
For consumers who want to protect their referral credits, experts recommend using browser extensions with caution. Users can disable extensions by default and only enable them when needed, or they can check the extension’s permissions and privacy policies before installing. Some privacy-focused browsers, like Brave, block third-party referral injection by default. Alternatively, users can manually copy coupon codes and apply them without relying on an extension.
Many retailers also offer direct affiliate programs or cashback sites that are less likely to engage in hijacking because they have more transparency and user loyalty. It may be worth choosing a few trusted sources rather than using a catch-all extension.
As for Phia, its promise to fix the issue is a step in the right direction, but trust is hard to rebuild once broken. The company will need to demonstrate that it has implemented robust monitoring and that it has compensated affected affiliates if it hopes to retain its user base and maintain partnerships with retailers.
The broader lesson for the tech industry is that transparency and user consent should not be afterthoughts. As more apps and extensions integrate into the shopping experience, safeguarding the integrity of affiliate marketing will require collaboration among developers, retailers, and regulators.
Source:The Verge News