Cambridge Analytica

AP Photo/Mark Lennihan, File

Cambridge Analytica Declaring Bankruptcy, Shutting Down

May 02, 2018 - 4:04 pm

NEW YORK (WCBS 880/AP) -- Cambridge Analytica, the Trump-affiliated data firm at the center of Facebook's worst privacy scandal in history, is declaring bankruptcy and going out of business.

The London-based firm blamed "unfairly negative media coverage" and said it has been "vilified" for actions it says are both legal and widely accepted as part of online advertising.

Cambridge Analytica said it has filed papers to begin insolvency proceedings in the U.K. and will seek bankruptcy protection in a federal court in New York.

"The siege of media coverage has driven away virtually all of the company's customers and suppliers," Cambridge Analytica said in a statement. "As a result, it has been determined that it is no longer viable to continue operating the business."

Cambridge Analytica has been linked to Donald Trump's 2016 presidential campaign. The British firm suspended chief executive officer Alexander Tayler in April amid investigations.

Cambridge Analytica sought information on Facebook to build psychological profiles on a large portion of the U.S. electorate. The company was able to amass the database quickly with the help of an app that appeared to be a personality test. The app collected data on tens of millions of people and their Facebook friends, even those who did not download the app themselves.

Last month, Facebook CEO Mark Zuckerberg said as many as 87 million accounts might have been accessed by Cambridge Analytica.

Testifying before A U.S. Senate committee late last month, Zuckerberg said his company "didn't take a broad enough view" of its responsibility for privacy and called it a "big mistake" that he's sorry for.

At the hearing, U.S. Sen. Bill Nelson (D-Florida) asked Zuckerberg why he did not notify the tens of millions of affected users that Cambridge Analytica had abused their data.

“When we learned in 2015 that Cambridge Analytica had bought data for an app developer on Facebook that people have shared it with, we did take action. We took down the app and we demanded that both the app developer and Cambridge Analytica… stop using any data that they had,” Zuckerberg said.

He said Cambridge Analytica told Facebook it had indeed stopped using the data, though that turned out not to be true.

“When we heard back from Cambridge Analytica that they weren’t using the data and they deleted it, we considered it a closed case,” Zuckerberg said. “In retrospect, that was clearly a mistake.”

When Sen. Dianne Feinstein (D-California) went on to ask why Facebook didn’t ban Cambridge Analytica in 2015, Zuckerberg replied, “They weren’t an advertiser, they weren’t running pages, so we actually had nothing to ban.”

Facebook has now tightened its privacy restrictions. Cambridge has denied wrongdoing, and Trump's campaign has said it didn't use Cambridge's data.

The firm has said it is committed to helping the U.K. investigation into Facebook and how it uses data. But U.K. Information Commissioner Elizabeth Denham said in March the firm failed to meet a deadline to produce the information requested.

Denham said the prime allegation against Cambridge Analytica is that it acquired personal data in an unauthorized way, adding that the data provisions act requires services like Facebook to have strong safeguards against misuse of data.

Facebook said it will keep looking into data misuse by Cambridge Analytica even though the firm is closing down.

Facebook's audit of the firm has been suspended while U.K. regulators conduct their own probe. But Facebook said Cambridge Analytica's decision to close "doesn't change our commitment and determination to understand exactly what happened and make sure it doesn't happen again."

(© 2018 WCBS 880. The Associated Press contributed to this report.)