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Cambridge Analytica Closing Down Following Facebook Data Misuse Scandal

Abrar Al-Heeti
Cambridge Analytica is shutting down effective Wendesday. © Provided by CNET Cambridge Analytica is shutting down effective Wednesday.

 

Cambridge Analytica, a political consulting firm, is shutting down following alleged misuse of Facebook data.

In a statement, the company said its UK and US arms would enter into insolvency and bankruptcy proceedings. The shutdown, effective Wednesday, was earlier reported by The Wall Street Journal.

Cambridge Analytica is at the centre of a scandal that’s stirred up two national governments and Facebook, the world’s largest social network. Facebook banned the consultancy last month, saying it had improperly received data from as many as 87 million user profiles. The controversy prompted Congress to summon Facebook CEO Mark Zuckerberg to Washington for testimony last month, an appearance that made headlines around the world.

Cambridge Analytica has denied wrongdoing but said the controversy weighed on its business and forced it to close its doors.

“The siege of media coverage has driven away virtually all of the company’s customers and suppliers,” the company said in its statement. “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.”

In the wake of the data-mining scandal, Zuckerberg faced more than 10 hours of hearings with three committees in the Senate and the House of Representatives. The hearings stretched over two days, during which he was grilled on everything from data privacy concerns, censorship and even how the Russian government manipulated Facebook to spread propaganda during the 2016 election.

In a statement, Facebook said it’s continuing its investigation with “relevant authorities.”

“This doesn’t change our commitment and determination to understand exactly what happened and make sure it doesn’t happen again,” a company representative said. Last week, Facebook reported a nearly 50 percent jump in sales, suggesting the biggest crisis in the company’s 14-year history has yet to take a toll.

The sudden decision to close shop marks a departure from Cambridge Analytica’s strong defence of itself. Just Monday, the company tweeted that followers should “Get the Facts Behind the Facebook Story,” adding a link to cambridgefacts.com. That site attempts to refute much of the coverage the firm has received in light of the scandal.

In March, Cambridge Analytica suspended Chief Executive Alexander Nix after he and other senior executives at the firm were caught on video saying they’d go beyond using data to hurt a client’s rival political candidate. Those tactics, Nix said in a report broadcast by the UK’s Channel 4, included entrapping politicians to influence an election’s outcome. Cambridge Analytica has ties to the Donald Trump campaign.

Neither Cambridge Analytica nor parent SCL Group immediately responded to a request for comment.

Last month, The New York Times reported that Emerdata, a new UK firm, had been created to house Cambridge Analytica and SCL Group. That, however, might not be enough to keep public scrutiny at bay, says Tim Bajarin, an analyst at Creative Strategies.

“If the principals who made these bad decisions at Cambridge Analytica just donned a new hat, I’m not sure they’ll be successful,” he said. “The fact that they made bad mistakes while they were at Cambridge Analytica — what’s going to keep them from doing that now under a new moniker?”

Also on Tuesday, Cambridge Analytica released the results of an independent investigation commissioned into whether it was involved in any wrongdoing. The investigation concluded that the allegations against Cambridge Analytica weren’t “borne out by the facts.”   (CNET)

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