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Cambridge Analytica Shutting Down

Cambridge Analytica, the firm whose use of Facebook data has shined a spotlight on online privacy, is shutting down.

The firm announced Wednesday that it was beginning insolvency proceedings in the United Kingdom, where it is based. Parralel bankruptcy proceedings will occur in the United States, in the Southern District of New York, the company said.

The firm said it has been losing clients because of the scandal, and reportedly is under the weight of increasing legal fees.

“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 company said.

“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,” it said. “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 firm created an app that asked people questions and collected their data, which is standard. But it also collected the data of those people’s Facebook  friends without their knowledge, a violation of Facebook’s rules. Facebook says that in all, including those whose data was harvested properly, and those whose data was taken improperly, nearly 90 million people were affected, including more than 70 million in the United States.

Cambridge Analytica used the data to create profiles of Facebook users in an effort to determine what kind of political ads to show them, based on which would be most effective – also a standard practice in advertising.

As a result of attention to the practice, Facebook has come under heavy scrutiny for whether it does enough to protect users’ privacy. Facebook founder Mark Zuckerberg had to go before two congressional committees to answer questions about the issue.

 

 

 

 

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