Explainer: Cambridge Analytica shuts down after Facebook data scandal, but has it really stopped operations?

By Elton Gomes

Cambridge Analytica (CA)—the data firm at the heart of Facebook’s controversial data scandal—is reportedly shutting down, and has filed for bankruptcy. CA’s British parent company, SCL Elections Ltd., will also be closing its doors after suffering a major loss in business, in the aftermath of the data scandal.

In a statement released by CA on Tuesday, the company said that it is “immediately ceasing all operations and the boards have applied to appoint insolvency practitioners.” The company claimed that “parallel bankruptcy proceedings will soon be commenced on behalf of Cambridge Analytica LLC and certain of the Company’s U.S. affiliates in the United States Bankruptcy Court for the Southern District of New York.”

CA came under fire after reports emerged that it had wrongfully obtained the personal data of roughly 87 million Facebook users. Facebook repeatedly blamed the political consultancy firm, and researcher Aleksander Kogan for the data theft. The social media giant claimed that Kogan illegally obtained data from a survey app, and transferred it to CA. However, CA did not destroy the data, despite having claimed to do so, the Independent reported.

Here’s what happened

Cambridge Analytica successfully created a smokescreen over its real time operations that ranged from potentially manipulating US voters to help US President Donald Trump’s campaign win the 2016 presidential election, establishing potential links to Russia—to hushing up the fact that several political parties in India have used its services.

In the mid-March, Christopher Wylie, former director of research at CA, turned whistleblower against the company, and shared details of the company’s secret workings alongside Facebook. Since then, both Facebook and CA have suffered blows to their reputation, and their very public blame game continues soiling their reputations.

Cambridge Analytica claimed that negative coverage from the press was one of the reasons that led to the firm shutting down operations. Denying all wrongdoings, the firm said that it 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.”

Questions over the closure

MP Damian Collins, head of the British House of Commons Media Committee, was skeptical of the firm closing down, and told BBC that investigations into the company mustcontinued, ABC News reported.

“We’ve got to make sure that this is not an attempt to run and hide, that these companies aren’t closing down to try and avoid being rigorously investigated,” Collins said, ABC News reported.

“Cambridge Analytica and SCL group cannot be allowed to delete their data history by closing”, Collins told the Guardian.

TechCrunch reported that the company’s closure might just be strategic rebranding, given its “already fairly shadowy business practices.” The report by TechCrunch questioned whether this was truly the end for Cambridge Analytica, or whether the firm is simply waiting for the media to lose interest and focus elsewhere.

A report by the Register mentions that the CA’s shutdown might be short-lived. According to the Register, the company’s official documents indicate that the individuals behind the firm “will be launching as a new firm with a less-toxic brand.” The report hinted that instead of truly shutting down all operations, this may just be a ploy CA’s part, while it rebrands under a new banner.

Why you should care

Several questions about Cambridge Analytica’s operations still remain unanswered, and only time will tell whether the company’s next step will involve rebranding. Media reports indicate that CA’s apparent closure may leave the potential resolution of the Facebook data scandal hanging in the balance.

Cambridge Analytica appears to want to put an end to all its problem by shutting down. But, will this strategy work for the company? Reports suggest that CA might not be let off that easily, especially given the implications of the data and political consulting firm having allegedly been involved in the Russian meddling probe, and harvesting data to customise political advertisements.

Cambridge AnalyticaFacebookTechnology