Cambridge Analytica Files For Bankruptcy After Facebook Data Misuse Scandal

Cambridge Analytica has lost all its clients and therefore cannot continue in business 

Cambridge Analytica has filed for bankruptcy two months after its scandal with Facebook Inc. saying that it cannot continue operations in the UK and US.

The London-based political consulting firm had harvested the private information of about 87million users without authorisation, which in fact plunged Facebook Inc. and the consulting into crises. Regulators and US lawmakers were compelled to open an investigation into both firms. However, while Facebook the firm which should suffer the more became more productive after the drilling by the US lawmakers, the same cannot be said of the political consulting firm.

 In a statement on its website, it had blamed the media for its setback, forcing it to file for bankruptcy. The part of the statement read:

“Despite Cambridge Analyrica’s unwavering confidence that its employees have acted ethically and lawfully, which view is now fully supported by Mr. Mains’ report, 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.”

It indicates that the damage caused by scandal is too severe to rebuild. Investigations are still ongoing in the United States and Britain. It noted further that dedicated employees would be losing their jobs as a result of the damage caused by “the unfairly negative media coverage.” Employees were notified via a conference call to submit the companies’ properties including their identity cards and return home. It said in the press statement that regardless of the financial condition, the company will meet its obligations to fulfil the rights of the employees regarding severance packages and redundancy entitlements.

Its downfall didn’t start with the scandal with Facebook. It first came under scrutiny in 2017 for profiling voters’ information, before harvesting users’ data to favour Donald Trump during the last US general elections. In 2016, it was investigated by Russia for interfering in the country’s election.

Despite these trolls of investigations, the company continued its operations not until it became embroiled with the most extensive social network worldwide.

At the beginning of the revelations, a video was leaked, featuring the Company’s Chief Executive, Alexander Nix. In the video, he suggested the use of seduction and bribery to blackmail the opponents of their clients to influence people-behaviour during the elections.

Facebook, it’s partner in the crises, has announced a change of policies to prevent a similar occurrence. Although it faced criticisms that caused their stock shares to plummet by $50b, the social network has since recovered and has moved on.

This same cannot be said of Cambridge Analytica. The controversy is a significant blow that has disrupted their expansion in the US and has attracted unwanted attraction by the US regulators.