UK Edition
Cambridge Analytica to shut down after Facebook privacy scandal
Cambridge Analytica, the British election consultancy that allegedly used data harvested from millions of Facebook users for political campaigning, is shutting down.
The company and its parent group SCL entered insolvency proceedings on Wednesday evening, it confirmed, appointing Crowe Clark Whitehill as administrators. US affiliate companies are also entering bankruptcy proceedings, it confirmed.
Cambridge Analytica worked for Donald Trump’s election campaign after previously having been employed for his Republican rival Ted Cruz, and carried out political consulting work around the world.
It was embroiled in a privacy storm in March when Facebook banned it from the social network following claims that it had used the private data of millions of users and failed to delete it three years ago.
Facebook has since revealed that Cambridge Analytica may have had access to up to 87m users’ details such as interests, relationship status and political views, including 1.1m in Britain.
On Wednesday night it said an independent investigation by British lawyer Julian Malins into recent allegations had found the claims against the company were “not borne out by the facts”. However, it blamed a “siege of media coverage” for driving away its customers and said it could no longer survive.
The company said its conduct had been "legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas".
“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," it said.
“Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, which view is now fully supported by Mr Malins’ report, 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.”
However, news of its closure prompted concerns that it could halt investigations into the work conducted by Cambridge Analytica.
Damian Collins MP, who chairs the Digital, Culture, Media and Sports select committee, said: "Cambridge Analytica and SCL group cannot be allowed to delete their data history by closing. The investigations into their work are vital."
In the UK, Cambridge Analytica has been under investigation by the Information Commissioner’s Office, and Facebook has also launched its own probe.
A spokesman for the Information Commissioner's office said it "has been investigating the SCL Group and Cambridge Analytica as part of a wider investigation into the use of personal data and analytics by political campaigns, social media companies and others".
"We will be examining closely the details of the announcements of the winding down of Cambridge Analytica and the status of its parent company.
"The ICO will continue its civil and criminal investigations and will seek to pursue individuals and directors as appropriate and necessary even where companies may no longer be operating. We will also monitor closely any successor companies using our powers to audit and inspect, to ensure the public is safeguarded.”
A spokesman for Facebook said its probe would continue: "This doesn't change our commitment and determination to understand exactly what happened and make sure it doesn't happen again.
"We are continuing with our investigation in cooperation with the relevant authorities."
Cambridge Analytica had been backed by the US billionaire Robert Mercer and included Steve Bannon, the former Trump campaign chief and aide, among its directors.
However, it had lost clients and had been faced with mounting legal action since the Facebook revelations in mid-March. It suspended its chief executive Alexander Nix shortly after when he was filmed by undercover reporters boasting of using bribes and women to influence elections.
As well as being investigated by the ICO, Cambridge Analytica has also been the subject of legal complaints in the US, and was banned by Twitter, as revealed by The Daily Telegraph last week.
The company had received Facebook data from a Cambridge University academic, Aleksandr Kogan, who had obtained it using a quiz app linked to people's Facebook profiles. It was downloaded by just 305,000 people.
Mr Kogan has said he never collected private message data for any commercial purpose.