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

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top