Unable to withstand the months-long scandal over its collection of data from millions of unsuspecting Facebook users, Cambridge Analytica, the data analytics firm that claimed to have helped Donald Trump gain the White House, closed its doors Wednesday, announcing that it was filing for bankruptcy.
“The Company is immediately ceasing all operations,” the company said in a statement.
“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 wrote, noting that an independent investigation by Queen’s Counsel Julian Malins “concluded that the allegations were not “borne out by the facts.”
In a report posted on the Cambridge Analytica site, Malins wrote that he “had full access to all members of staff and documents” during his probe. “My findings entirely reflect the amazement of the staff, on watching the television programmes and reading the sensationalistic reporting, that any of these media outlets could have been talking about the company for which they worked,” he said. “Nothing of what they heard or read resonated with what they actually did for a living.”
But as the story goes, an app developed by Cambridge University professor Aleksandr Kogan called thisisyourdigitallife harvested data for the firm, owned in part by hedge fund operator Robert Mercer and once led by former White House adviser Steve Bannon. About 270,000 Facebook users signed up to take a paid personality test through the app. Their data and that of their friends, counting in the millions, was passed along to Cambridge Analytica.
“We exploited Facebook to harvest millions of people’s profiles. And built models to exploit what we knew about them and target their inner demons,” whistleblower Christopher Wylie, who worked closely with Kogan, told the Observer. “That was the basis the entire company was built on.”
By passing along information from users who had not given permission to a third party and then also not properly deleting that data, Facebook says Kogan and Cambridge Analytica broke its rules. The entire debacle has brought intense scrutiny to the data collection and sharing practices of Facebook and other social media firms.
Cambridge Analytica’s shutdown comes just days after revelations that Twitter sold data access to the firm. “While details about this connection are still forthcoming, Twitter has verified that this information was indeed sold to Dr. Kogan and his firm GSR,” said Marcus Harris, technology attorney for Taft Stettinius & Hollister. “However, the social media giant maintains that they have performed their own internal review and can comfortably say that GSR was not given any private data from their users.”
Twitter’s assurances aside, Harris said, “an external review is needed before we can really be certain what information was sold and how users were impacted.”
Since Twitter works differently than Facebook, he said, the information gathered likely was less sensitive. “Twitter is currently arguing that tweets are meant to be public, so ergo selling public tweets should not be an issue. And, indeed, Twitter users do tend to have a greater awareness that their words are easily accessible by millions,” said Harris. “But, that doesn’t mean we should not consider the ethical complications of selling users’ tweets, especially without their knowledge or consent.”
The revelations enforce the need for stringent privacy requirements, like those found in the General Data Protection Regulation (GDPR) slated to take effect later this month. “Some experts are concerned about potential over-regulation with the upcoming enforcement of GDPR. However, exactly such incidents may well justify severe regulation of the personal data market,” said Ilia Kolochenko, CEO at High-Tech Bridge, explaining that “Twitter, for example, has already adjusted its Terms of Service and Privacy to comply with the new European regulations.”