Categories LATEST, Technology

Cambridge Analytica succumbs to data scandal; files for bankruptcy

There are many examples of thriving businesses getting embroiled in scandals that ultimately spoil their financial prospects, but rarely well-established companies wind up their operations for good in such situations. In the case of Cambridge Analytica, the controversy was so big that an irreversible setback was widely expected.

However, the UK-based political consulting firm had a rather sudden downfall, which could most probably be the ripple effect of the bitter blow suffered by its former business partner Facebook (FB). Cambridge Analytica, which allegedly played a crucial role in manipulating voter sentiment in the favor of Donald Trump during the presidential election, has filed for bankruptcy, two weeks after discontinuing operations.

In the Chapter 7 petition submitted at the US Bankruptcy Court Southern District of New York, the company cited shrinking business and mounting liabilities as the reason for seeking liquidation. It declared assets of up to $500,000 and liabilities of up to $10 million. Referring to the allegation, the firm asserted that none of its employees had acted in an illegal or unethical manner, and blamed negative media reports for losing customers and suppliers en masse.

In the Chapter 7 petition, the company cited shrinking business and mounting liabilities as the reason for seeking liquidation

Ever since the allegations popped up – of Cambridge Analytica harvesting personal information of about 87 million Facebook users through illegal means – both the companies faced a series of investigations. It all started after former executive Christopher Wylie revealed that Cambridge Analytica had used a Facebook app to harvest information about the users, which the company later denied.

Later, Facebook chief Mark Zuckerberg appeared before the US congressional committees to testify on the company’s data protection policy and was summoned by the European Parliament recently. In a major crackdown, the social media giant this week scrapped more than 200 apps that accessed user data illegally. It shows the enormity of the privacy threat social media users are facing.

The recent revelation by a whistleblower showed that the Brexit vote was manipulated using illegal data and indicates that in all probability, the Facebook-Cambridge Analytica case is just a tip of the iceberg. While cautioning users, it also underlines the need for more advanced encryption technologies to safeguard personal information.

Most Popular

GameStop (GME) Earnings: Q1 loss narrows on 25% sales growth

Video game retailer GameStop Corp. (NYSE: GME), which has become the talk of the town after the unprecedented stock rally in recent weeks, reported a narrower loss for the first

Should you invest in Steel Dynamics (STLD) stock after 78% rally?

The steel industry managed to shrug off the pandemic blues earlier than expected as the recovery in industrial activity pushed up demand. With the vaccination drive and the government’s aggressive

Campbell Soup (CPB) Q3 Earnings: Key financials and quarterly highlights

Campbell Soup Company (NYSE: CPB) reported third-quarter 2021 earnings results today. Net sales decreased 11% year-over-year to $1.98 billion, as a result of lapping the demand surge at the onset


Add Comment
Viewing Highlight