Cambridge Analytica Shuts Down and Files Bankruptcy
Following repeated allegations and significant loss of clients, the political consultancy Cambridge Analytica announced on Wednesday that it will stop operations and declare bankruptcy in the U.S. and the UK. The firm became widely known for its questionable contributions to the latest US elections.
According to a public statement, the company lost a significant amount of clients after revelations in March that information on Facebook users was obtained illegally, or at least improperly, which led the firm to conclude that “it is no longer viable to continue operating the business”. However, affiliates also stressed that the company’s use of Facebook simply resembled widely accepted standards of online advertising.
The latest revelations showed that Cambridge Analytica collected the respective data from a Facebook quiz app called ThisIsYourDigitalLife that was created by researcher Alexander Kogan. The collected data of an estimated 87 million Facebook users were then used to generate detailed profiles of voters’ backgrounds and preferences to decide which political messages might appeal to their ‘personalities’.
Legally, it remains to be seen whether this practice complies with US federal elections law limiting the influence of non-U.S.-citizens in American campaigning. While the company’s headquarters are located in London, Cambridge Analytica was also long home to known American Republicans, such as strategist Stephen K. Bannon, its former vice president and later strategist for the Trump campaign, and John Bolton, current national security adviser, who controlled one of its biggest clients, an American super PAC.
The company was originally founded as an American daughter company of the London-based SCL group that is known for contributing to various international campaigns. Funded by Republican financier Robert Mercer with the purpose to exclusively support GOP candidates in 2014, the company soon obtained international attention. Responding to this attention, Facebook also released various statements expressing its desolation about the data abuse while stressing its, questioned non-compliance with respective companies.
However, the initial problems still persist. As Jeff Chester of the Center for Digital Democracy pointed out, “the closing of Cambridge Analytica doesn’t stop the problem that voters and consumers face in terms of a growing loss of privacy and a gross misuse of their data”.