British data firm Cambridge Analytica is shutting shop with immediate effect

In a perhaps ironical twist of fate, the Cambridge Analytica fiasco that has engulfed Facebook over the last month has claimed its first major victim – Cambridge Analytica itself. The British data collection and analysis firm and its parent company SCL Elections Ltd. announced yesterday that the companies were shutting down operations across the world, effective immediately. According to a report in Wired, the decision was announced at a global town hall hosted at Cambridge Analytica’s New York offices on Wednesday.

In a press statement released announcing the decision, Cambridge Analytica stated, “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 that was immediately ceasing all operations and had filed applications to commence insolvency proceedings in the UK, appointing insolvency specialists Crowe Clark Whitehill LLP as the independent administrator for the firm.

Cambridge Analytica first came to the limelight in mid-March when reports from The New York Times and The Observer revealed that the firm had gained access to the user data of millions of Facebook users via a third-party Cambridge-based researcher Aleksandr Kogan. Aleksandr used a “quiz” app called “ThisIsYourDigitalLife" to collect data about Facebook users who used the app, as well as their friends, before selling that information to Cambridge Analytica. Investigations later revealed that the data of nearly 87 million Facebook users were collected and sold, including that of Founder and CEO Mark Zuckerberg, making this one of the largest data breaches in Facebook’s history.

A lot of the coverage post the scandal has focused on Facebook and its response to the scandal; however, Cambridge Analytica has also been at the receiving end of a lot of criticism, particularly after allegations surfaced that the data firm had used the Facebook data to influence political elections in the US and elsewhere. The firm’s then CEO Alexander Nix was also caught on camera by Channel 4 bragging about using underhanded techniques like bribery and entrapment to undermine candidates on behalf of its clients.

For its part, Cambridge Analytica has always protested its innocence. In its statement, the firm said, “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.” In response to the company’s decision to shut down, Facebook issued a statement, “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.”

However, many stakeholders have raised questions about the shutdown and the intentions behind it. Damian Collins MP, the chair of a UK Parliament committee investigating Cambridge Analytica’s activities, told the BBC, “They are party to very serious investigations and those investigations cannot be impeded by the closure of these companies...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.”