Cambridge Analytica, the controversial firm embroiled in the mishandling of Facebook user data, has announced its shut down on Wednesday. Its British parent SCL Elections Ltd. will also be shuttered as the data analytics company reported a significant decline in business.
In a press release, Cambridge Analytica blamed negative media coverage for the data scandal. It lost suppliers and clients while facing mounting legal fees, prompting the company to file for insolvency in the UK and begin bankruptcy proceedings in the US. Moreover, the company stated that it will meet its obligations to its employees, such as severance terms and redundancy entitlements.
Cambridge Analytica denied allegations of wrongdoing in improperly obtaining Facebook user data. They insisted that efforts to clear the air were ignored as the company continues to be vilified for its data gathering activities, which is common for targeted online advertising.
“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,” it wrote.
The company, hired by President Donald Trump’s election campaign, has been accused of inappropriately harvesting data from 87 million Facebook users through a personality quiz. It was later revealed that the data was for targeted political advertising.
Aside from hurting the shares and reputation of Facebook, the scandal also sparked multiple official investigations in the US and Europe. Politicians are likewise calling for stricter regulatory controls over tech companies as they continue to face scrutiny concerning broader data privacy issues.
According to Britain’s data regulator, criminal and civil investigations on Cambridge Analytica will still continue and pursue “individuals and directors as appropriate” despite the firm’s closure. Questions remain about what happens to the company’s intellectual property, including data servers and history. However, regulators emphasized that the political firm is not allowed to delete its data repository after the shutdown.
Established in 2013, the company positioned itself as a provider of consumer research, targeted advertising, and other data-related services to political and corporate clients. The company claimed that it could develop psychological profiles of consumers and voters to influence decisions more effectively than traditional advertising. And with Trump’s win in the 2016 US elections, Cambridge Analytica CEO Alexander Nix went on to successfully market his company’s services.
After the data debacle, certain individuals involved with Cambridge Analytica, including Nix, have formed a new enterprise called Emerdata. However, details about its business plans remain undisclosed to date.