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LONDON/WASHINGTON: Cambridge Analytica, the firm embroiled in a controversy over its handling of Facebook user data, and its British parent SCL Elections, are shutting down immediately after suffering a sharp drop in business, the company said on Wednesday.
The company will begin bankruptcy proceedings, it said, after losing clients and facing mounting legal fees resulting from the scandal over reports the company harvested personal data about millions of Facebook users beginning in 2014.
鈥淭he siege of media coverage has driven away virtually all of the Company鈥檚 customers and suppliers,鈥� the statement said.
鈥淎s a result, it has been determined that it is no longer viable to continue operating the business, which left Cambridge Analytica with no realistic alternative to placing the company into administration.鈥�
Allegations of the improper use of data for 87 million Facebook users by Cambridge Analytica, which was hired by President Donald Trump鈥檚 2016 US election campaign, has hurt the shares of the world鈥檚 biggest social network and prompted multiple official investigations in the United States and Europe.
鈥淥ver the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the company鈥檚 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,鈥� the company鈥檚 statement said.
The firm is shutting down effective Wednesday and employees have been told to turn in their computers, the Wall Street Journal reported earlier.
The Cambridge Analytica sign had been removed from the reception area of its London offices on Wednesday. At SCL鈥檚 Washington, D.C. office, a man declined to answer questions from a Reuters reporter.
After the announcement, Britain鈥檚 data regulator said it would continue civil and criminal investigations of the firm and will pursue 鈥渋ndividuals and directors as appropriate鈥� despite the shutdown.
鈥淲e will also monitor closely any successor companies using our powers to audit and inspect, to ensure the public is safeguarded,鈥� a spokeswoman for the Information Commissioner鈥檚 Office said in a statement.
Cambridge Analytica was created around 2013 initially with a focus on US elections, with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by future Trump White House adviser Steve Bannon, the New York Times reported.