A high-profile scandal has erupted around the startup of Phoebe Gates, 23, the youngest daughter of Microsoft founder Bill Gates.

The Phia browser extension was designed to automatically display coupons and discount codes during online shopping. At first, the business was booming: the company raised more than $40 million from investors and celebrities such as Hailey Bieber, Khloe Kardashian, Sydney Sweeney, Paris Hilton, and Jessica Alba.

But now Phia has been charged with major fraud. As per a new Bloomberg report, the startup has been engaged in "cookie stuffing" for months. “Cookie stuffing” is a form of fraud in which cookie files are added or replaced in a user's browser without their knowledge. This enables the company to receive commissions on sales that it did not actually make.

According to Bild, Ariel Givner, founder and principal attorney at Givner Law, warned in a post on X that in the US this practice is often prosecuted under the law as internet fraud. In such cases, large fines and, in theory, a maximum sentence of up to 20 years in prison are possible. However, no formal charges have yet been filed against Phoebe Gates.

At the same time, according to Bloomberg sources, Gates and her co-founder were aware of the controversial methods as early as late 2025. Allegedly, in a December 2025 memo, Gates had asked whether the automatic installation of cookies was activated on all websites, which would enable Phia to make as much profit as possible from sales.

The startup itself denies the allegations, emphasizing that the problematic features were removed back on July 7.