pineappledan
Deity
lol, I think you just described an incredibly interesting mechanic for a Phoenician civ. Settlers built by this civ create mercantile city states with a unique Tyrian Purple luxury and 60Maybe give Venice a unique Settler type that doesn't settle cities, it doesn't settle even puppeted cities, but it settles new City States with Italian names that start at 60 influence with Venice (but no other bonuses towards Venice). Or have them have a chance to spawn a new CS-controlled Settler in their lands that will go to settle somewhere nearby, or maybe have the spawning of that CS settler be managed by some action, like building it, spawning a Great Person, process like Public Works (name it "attract competitors" or something) which spawns a new Italian-named CS in the closest possible location to Venice, preferably one that can't take Venice's tiles (so at least 6 tiles away from Venice).
This way, Venetian niche of not settling is kept where it is, but it can deny and indirectly take land by having a controllable way to spawn CS.
However even with that Venice still needs some actual Supply and preferably it's more Great Merchants points back, even if reduced...

2 extra city-states settled at 6-7 tiles distance from Venice would cover that monopoly issue, it would also alleviate the hate about playing vs Venice gobbling up all the city-states in a normal game if he guarantees 2 more than usual.