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Cambridge Analytica shuts down amid Facebook data crisis

Cambridge Analytica sought information on Facebook to build psychological profiles on a large portion of the US electorate.

Alexander Nix, CEO of Cambridge Analytica
Alexander Nix, CEO of Cambridge Analytica
Image: Christian Charisius

CAMBRIDGE ANALYTICA, the UK marketing analytics firm at the heart of the Facebook data scandal, has announced it is “immediately ceasing all operations” and filing for insolvency in Britain and the United States.

“It has been determined that it is no longer viable to continue operating the business,” the company, accused of misusing tens of millions of Facebook users’ data, said in a statement.

The political consultancy firm has been linked to Donald Trump’s 2016 presidential campaign.

Cambridge Analytica sought information on Facebook to build psychological profiles on a large portion of the US electorate.

The company was able to amass the database quickly with the help of an app that appeared to be a personality test. The app collected data on tens of millions of people and their Facebook friends, even those who did not download the app themselves.

Facebook has since tightened its privacy restrictions. Cambridge has denied wrongdoing, and Trump’s campaign has said it didn’t use Cambridge’s data.

Independent investigation

In light of recent events, UK Counsel Julian Malins was retained to conduct an independent investigation into the allegations regarding the company’s political activities.

Malins’ report, which the company posted on its website today, concluded that the allegations were not “borne out by the facts”.

“I had full access to all members of staff and documents in the preparation of my report. My findings entirely reflect the amazement of the staff, on watching the television programmes and reading the sensationalistic reporting, that any of these media outlets could have been talking about the company for which they worked,” Malins said.

“Nothing of what they heard or read resonated with what they actually did for a living.”

Cambridge Analytica said in a statement this evening that despite its “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 had driven away virtually all of the company’s customers and suppliers”.

As a result, it had 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.

“While this decision was extremely painful for Cambridge Analytica’s leaders, they recognise that it is all the more difficult for the company’s dedicated employees who learned today that they likely would be losing their jobs as a result of the damage caused to the business by the unfairly negative media coverage,” the statement continued.

The firm has said it is committed to helping the UK investigation into Facebook and how it uses data. But UK Information Commissioner Elizabeth Denham said in March the firm failed to meet a deadline to produce the information requested.

Denham said the prime allegation against Cambridge Analytica is that it acquired personal data in an unauthorized way, adding that the data provisions act requires services like Facebook to have strong safeguards against misuse of data.

With reporting by AFP and Associated Press.

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