Cambridge Analytica and British parent shut down after Facebook scandal

Cambridge Analytica and British parent
shut down after Facebook scandal

Cambridge Analytica, the firm embroiled in a
controversy over its handling of Facebook Inc
user data, and its British parent SCL Elections
Ltd, are shutting down immediately after
suffering a sharp drop in business, the
company said on Wednesday.
The company will begin bankruptcy
proceedings, it said, after losing clients and
facing mounting legal fees resulting from the
scandal over reports the company harvested
personal data about millions of Facebook
users beginning in 2014.
"The siege of media coverage has driven away
virtually all of the Company’s customers and
suppliers," the statement said.
"As a result, it has been determined that it is
no longer viable to continue operating the
business, which left Cambridge Analytica with
no realistic alternative to placing the company
into administration."
Allegations of the improper use of data for 87
million Facebook users by Cambridge
Analytica, which was hired by President
Donald Trump's 2016 US election campaign,
has hurt the shares of the world's biggest
social network and prompted multiple official
investigations in the United States and
Europe.
"Over the past several months, Cambridge
Analytica has been the subject of numerous
unfounded accusations and, despite the
company’s efforts to correct the record, has
been vilified for activities that are not only
legal, but also widely accepted as a standard
component of online advertising in both the
political and commercial arenas," the
company's statement said.
The firm is shutting down effective Wednesday
and employees have been told to turn in their
computers, the Wall Street Journal reported
earlier.
The Cambridge Analytica sign had been
removed from the reception area of its London
offices on Wednesday. At SCL's Washington,
DC office, a man declined to answer questions
from a Reuters reporter.
After the announcement, Britain's data
regulator said it would continue civil and
criminal investigations of the firm and will
pursue "individuals and directors as
appropriate" despite the shutdown.
"We will also monitor closely any successor
companies using our powers to audit and
inspect, to ensure the public is safeguarded,"
a spokeswoman for the Information
Commissioner's Office said in a statement.
Cambridge Analytica was created around 2013
initially with a focus on US elections, with $15
million in backing from billionaire Republican
donor Robert Mercer and a name chosen by
future Trump White House adviser Steve
Bannon, the New York Times reported.
Cambridge Analytica marketed itself as a
provider of consumer research, targeted
advertising and other data-related services to
both political and corporate clients.
After Trump won the White House in 2016, in
part with the firm’s help, Cambridge Analytica
CEO Alexander Nix went to more clients to
pitch his services, the Times reported last
year. The company boasted it could develop
psychological profiles of consumers and voters
which was a "secret sauce" it used to sway
them more effectively than traditional
advertising could.
One unanswered question in Special Counsel
Robert Mueller’s investigation into whether
there was any collusion between Trump's
campaign and Russia is whether Russia’s
Internet Research Agency or Russian
intelligence used data Cambridge Analytica
obtained from Facebook or other sources to
help target and time messages during the
campaign that were anti-Hillary Clinton, pro-
Trump and politically and racially divisive.
Bannon was a former vice president of the
London-based firm, and Mueller has asked it
to provide internal documents about how its
data and analyses were used in the Trump
campaign, according to sources familiar with
the investigation.