Cambridge Analytica Files for Bankruptcy

May 8, 2018 - 4 minutes read

mobile app developersBy now, you’re probably quite familiar with Facebook’s data scandal involving Cambridge Analytica. Recently, the London-based company posted a statement on its website saying that it has been forced to file for bankruptcy after bad press from the whole ordeal.

The Cost of Business

Cambridge Analytica cited “the controversy” as the driving force behind its loss of customers. The company filed for bankruptcy in the U.S. and Britain. Critics have pointed out that the announcement was vague; who retains the company’s intellectual property? And are we going to allow the company’s founders go on to start other companies doing the same exact thing?

The announcement comes less than two months after the scandal first broke headlines. Aleksandr Kogan, a data scientist and developer, created a quiz app that harvested 87 million Facebook profiles for information using just 270,000 quiz players. The app took advantage of Facebook’s API, which allows programmers to see users’ friends’ profiles in addition to the user’s profile. He then sold this data to Cambridge Analytica, who used it to target advertisements towards voters during Trump’s presidential campaign. Cambridge Analytica did this without user consent.

Reborn in Another Form

Since then, the company and Facebook have been under intense scrutiny by regulators and legislators. In recent months, however, Cambridge Analytica executives and founder Robert Mercer have created a new data firm, called Emerdata. Among the directors is Erik Prince, the founder of Xe Services (formerly and better known as Blackwater), a private security company.

The company isn’t admitting to doing anything wrong, though. The statement says, “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.”

Phew. That’s a long sentence that basically boils down to “I’m not guilty”; Cambridge Analytica also says that it is “futile” and “pointless” to rebuild the company in the midst of ongoing investigations and probes by the U.S. and U.K. governments. Recently, it also came to light that Twitter sold data access to Kogan. As a result and as a precaution, Cambridge Analytica is no longer allowed to advertise on Twitter. However, that may not mean much if members of the controversial firm are working under another name.

Who Should Shoulder the Blame?

What Cambridge Analytica did wasn’t illegal. After all, data is sold and brokered every day for targeted online advertising. But it had to pay the price, literally, for Facebook’s scandal. Meanwhile, Facebook’s stock and revenues continue to rise from their use of their own data to sell advertising across the site.

Data science is coming to every industry. Where do we draw the line in using data for presidential campaigns? Where is the line drawn for simple web scraping, which even beginner web developers can code and deploy? It is clear that most U.S. politicians do not understand data, Internet advertising, web scraping, and Facebook itself.

The Internet, technology, and politics haven’t always been associated together. But they need to figure out a way to work well together; our society will be greatly impacted by this.

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