Cambridge Analytica to shut down after Facebook data breach scandal

May 3, 2018 11:50 IST
Cambridge Analytica to shut down after Facebook data breach scandal

Cambridge Analytica, the UK-based data analytics company that was caught in a massive data-harvesting scandal has announced that it would immediately shut its operations, as the controversy has driven away virtually all of its customers.

The move comes just two months after the scandal broke out, in which it was revealed that the data analytics company had illegally harvested data of over 87 million Facebook users and used it to manipulate voter behavior in the 2016 US Presidential elections.

The scandal led Facebook CEO Mark Zuckerberg to issue a public apology, as it raised questions on the social media giant’s privacy policies.

Cambridge Analytica however, denied any wrongdoing. The company cited negative media coverage as the main reason for closure. It stated that the negative reports had left it with no clients and mounting legal fees.

In an official statement, the company said that despite its efforts to correct the record, it 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.

Key Highlights

• Cambridge Analytica’s board has applied to appoint UK accountancy firm and insolvency practitioner Crowe Clark Whitehill to act as the independent administrator for the company.

• The decision was taken after the board determined that it was futile to rebrand the company’s offerings in the current environment.

• From here, parallel bankruptcy proceedings will be initiated on behalf of Cambridge Analytica and some of the company’s US affiliates in the United States Bankruptcy Court for the Southern District of New York.

• The company’s parent company, SCL Elections, would also commence bankruptcy proceedings.

Damian Collins, the chair of a UK Parliament committee investigating the firm’s activities raised concerns about CA and SCL Elections’ move to shut down. Collins said that CA and its parent firm are party to very serious investigations and the investigations cannot be obstructed by the closure of these companies.

“I think it’s absolutely vital that the closure of these companies is not used as an excuse to try and limit or restrict the ability of the authorities to investigate what they were doing,” Collins added.


How would this impact India?

The ceasing of operations by Cambridge Analytica could impact its Indian operations as well.

The report of an independent investigation released by Cambridge Analytica said that it was involved in several elections in India since 2010, but refuted allegations that it was involved in interference.

Cambridge Analytica controversy: Explained


• Cambridge Analytica was accused of illegally obtaining the personal information of users on behalf of political clients.

• According to Facebook, the data of up to 87 million of its users was harvested by an app called 'thisisyourdigitallife' and then passed on to Cambridge Analytica to help it manipulate voter behavior to support its political campaign.

• The data analytics company is alleged to have a hand in assisting with Donald Trump’s victory in US Presidential Elections 2016.

• It has also been linked to the Leave EU camp during Britain’s exit from the European Union (Brexit).

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