Facebook users try data grab as Cambridge Analytica evaporates
(Bloomberg) -- Facebook users who say their personal data was misused, potentially to distort the last U.S. election, will find out Tuesday whether they can squeeze more information out of a quickly evaporating company that played a role: Cambridge Analytica.
The political consulting firm is winding down both in the U.K., its home country, and in a New York Chapter 7 bankruptcy case. Some of the dozens of Facebook users who sued it and Facebook in district court appeared in the bankruptcy as “data breach plaintiffs” to ask if they can gather more information about Cambridge Analytica’s finances.
At stake is whether there’s any value to claim if they succeed in their lawsuits, which are still in early stages. One topic of interest, the data breach group says, is Emerdata Ltd., a company that bought 89.5 percent in Cambridge Analytica from Chief Executive Officer Alexander Nix and Cambridge Analytica affiliates just before the bankruptcy.
“In any case where a debtor engages in these kinds of transactions in advance of a Chapter 7 filing, it sparks interest,” Michael Etkin, a lawyer for the data breach group, said in a phone interview. Etkin declined to comment on what types of claims they could make. But under bankruptcy law, assets transferred out of an estate just before a filing can sometimes be clawed back.
Emerdata, said to be under court administration, is also a figure of interest to British lawmakers, who last month recommended it be investigated amid concerns that Kremlin-backed groups used social media to influence elections.
While Emerdata may be winding down, another company, Data Propria, has hired some former Cambridge Analytica executives. It is bringing in revenue for its parent company CloudCommerce Inc. since being formed in February 2018, according to CloudCommerce’s regulatory filings. The Associated Press has reported that it is run by former Cambridge Analytica officials and is working on President Donald Trump’s 2020 re-election campaign. CloudCommerce didn’t return a message seeking comment.
The data breach group represents only some Facebook members who have sued. In around 25 similar cases that were recently consolidated in a California court, members allege Cambridge Analytica mounted a “massive data mining campaign” on 87 million Facebook users, and may have used the data when it worked on President Trump’s campaign in 2016. The suits question Facebook’s role and seek damages from either company for what they say were invasion of privacy and increased risk of theft and data breaches.
Cambridge Analytica, Facebook Inc. and a trustee overseeing the case all filed objections to the group’s requests in bankruptcy court. Cambridge Analytica said it can’t comply with them because it doesn’t have employees and doesn’t possess the information sought. Facebook said it doesn’t know whether Cambridge Analytica currently possesses any Facebook user data -- despite Cambridge Analytica having already said the data was destroyed. Facebook added that an order in the California suit already covers the issue. The trustee said the claims may run afoul of his attorney-client privilege.
Facebook users shot back in court filings that they’ve identified “numerous other causes for concern” since they first made their request. They cited a lack of clarity about the company’s assets in the case so far and the statement made by Chief Executive Officer Julian Wheatland that he’s unsure whether he or other representatives have continued access to web-based accounts, or whether a customer list exists. Also, they noted, Wheatland was directed not to answer questions when it came to whether the company had actual possession of user information.
Cambridge Analytica’s backers have included the Mercer family. Its bankruptcy petition was signed by board members Rebekah Mercer and Jennifer Mercer, daughters of former New York hedge fund manager Robert Mercer. His family backed Donald Trump for president and helped reshape American conservative politics.
Lawyers for Cambridge Analytica and Facebook didn’t return messages seeking comment.