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Cambridge Analytica declares bankruptcy and shuts down; investigation ongoing

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Cambridge Analytica has declared bankruptcy and announced it is shutting down its operations, while the investigation into the way in which it gathered data from Facebook users continues.

The firm said it could not continue after suffering a sharp drop in business resulting from negative press coverage and will now begin bankruptcy proceedings.

It is also facing mounting legal fees resulting from the scandal over reports that it harvested personal data about millions of Facebook users, beginning in 2014.

The company, which worked on the Brexit campaign, sustained severe criticism over its gathering of data from millions of Facebook profiles to target users with personalised adverts.

The Information Commissioner’s Office (ICO) said its investigations will continue to “seek to pursue individuals and directors as appropriate”.

While Damian Collins, chair of the Commons select committee for Digital, Culture, Media and Sport (DCMS), tweeted: “Cambridge Analytica and SCL Group cannot be allowed to delete their data history by closing. The investigations into their work are vital.”

Allegations of the improper use of data for 87 million Facebook users by Cambridge Analytica, which was hired by President Donald Trump’s 2016 US election campaign, has hurt the share price of Facebook - the world’s biggest social network - and prompted multiple official investigations in the United States and Europe.

An ICO spokeswoman said: “We will be examining closely the details of the announcements of the winding down of Cambridge Analytica and the status of its parent company.

“The ICO will continue its civil and criminal investigations and will seek to pursue individuals and directors as appropriate and necessary, even where companies may no longer be operating.

“We will also monitor closely any successor companies using our powers to audit and inspect to ensure the public is safeguarded.”

Cambridge Analytica designed an app to run on Facebook, a personality survey called ‘yourdigitallife’ built by Aleksander Kogan of Cambridge University, which collected personal data from users and their Facebook friends, in line with the behaviour of many similar apps at the time.

It allowed Cambridge Analytica to tailor specific political adverts to small groups of people, already knowing what their likes and interests were, it is alleged.

The firm played a key role in mapping out the behaviour of voters in the run-up to the 2016 US election and was also used during the EU referendum campaign earlier that year.

In a statement, Cambridge Analytica 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.

“Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, which view is now fully supported by Mr Malins’ report [independent investigator Julian Malins], 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.”

Facebook announced a number of new features for its site at its annual conference this week, including a dating tool based on users’ profiles and the introduction of stylised ‘3D’ images taken with an ordinary camera. 

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