Today in Nepo-Babies

Phoebe Gates, Bill Gates' daughter appears to have been directing a sales referral fraud network in her shopper referral app.

Here's hoping that she sees some jail time.  Not Elizabeth Holmes time, but maybe Martha Stewart time.

Phia co-founders Phoebe Gates and Sophia Kianni pushed for features in the e-commerce startup’s software that took credit for sales it didn’t drive, according to internal communications and people with knowledge of the matter.

The founders were aware of the practice for at least seven months going back to December, according to the people and messages posted on the company’s internal Slack channels that were shared with Bloomberg News. The people asked not to be identified as they were not authorized to discuss the issue.

That timetable runs counter to public remarks by the company, which said on July 8 that it had only become aware of the situation “within the last 24 hours.”

Phia bills itself as a “personal shopping assistant” that helps users find the lowest prices on a broad range of clothes and fashion accessories. It operates a browser extension that, when used as part of the online checkout process, can quickly find discount codes for products and save shoppers money. When a shopper uses Phia’s product to help make a purchase, the company earns a commission from the retailer for helping drive the sale.

But Phia’s browser extension was also designed to report that the startup drove a sale even when its product was never used – a practice that resulted in increased commissions, Bloomberg reported in July. The company said at the time that the problem stemmed from a software bug that had only been discovered on the day it was contacted by Bloomberg.

………

These techniques, known as “cookie stuffing,” were responsible for a significant portion of Phia’s sales, according to an internal revenue chart seen by Bloomberg. After Phia disabled the features in early July, average daily revenue at the company dropped from about $80,000 to between $10,000 and $28,000, the chart shows. A Slack message posted by a Phia data scientist on July 7 and reviewed by Bloomberg estimated that cookie stuffing accounted for about 51% of the merchandise value Phia claimed credit for selling in June. 

Yeah, and Phia has been through a series of fundraising stages that have the company valued at $180 million.

Nope, no fraud here.