Cambridge Analytica, the data analytics firm which is in the eye of a storm for allegedly harvesting personal data without the consent of Facebook users, along with its British parent firm SCL Elections Ltd, has decided to shut operations immediately, a press statement released by CA Commercial said on Wednesday. The company is also accused of using personal data of millions of Facebook users to sway the results of the 2016 US Presidential elections and UK Brexit referendum.
Analytica has decided to cease all operations and appoint insolvency practitioner Crowe Clark Whitehill LLP to act as the independent administrator for the firm. Simultaneously, the statement said, the two firms have agreed to commence bankruptcy proceedings as it has lost several clients and faces legal proceedings in the wake of the controversy.
“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 statement said.
While denying any wrongdoing, the company said that it is the negative media coverage which has left it with no clients and mounting legal fees, thus forcing it to shut down operations. “Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, the siege of media coverage has driven away virtually all of the Company’s customers and suppliers. 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,” the company added.
The data leak came to light after Channel 4 aired an undercover footage of Cambridge Analytica CEO Alexander Nix, sharing examples of how the firm was capable of influencing voters across the world through tactics such as smear campaigns and honey traps. Following this, Nix was suspended “with immediate effect pending a full, independent investigation”. “In the view of the board, Mr Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation,” the company’s statement said last month.
However, the chair of a UK Parliament committee which is probing the firm’s activities expressed concerns over the decision of the two firms to shut down. “They are party to very serious investigations and those investigations cannot be impeded by the closure of these companies,” MP Damian Collins said.
“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,” he added.
According to Facebook, data of up to 87 million of its users was harvested by an app and later shared with the political consultancy. The social network said its own investigation into the case would continue. On Tuesday, CEO Mark Zuckerberg vowed that the company will build its way out of its worst-ever privacy debacle and reiterated that the social networking site is investing a lot in security and in strengthening its systems to ensure they are exploited to meddle with during the elections, including the US midterms later this year.
Cambridge Analytica is a part of SCL Group, a government and military contractor that says it works on everything from food security research to counter-narcotics to political campaigns. SCL was founded more than 25 years ago, according to its website. It 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.
(With agency inputs)