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Here's everything you need to know about the Cambridge Analytica scandal

  • Alongside social media giant Facebook, Cambridge Analytica is at the center of an ongoing dispute over the alleged harvesting and use of personal data. Both companies deny any wrongdoing.
  • Britain's Channel 4 News on Monday filmed senior executives at Cambridge Analytica, including its CEO Alexander Nix, suggesting the firm could use sex workers, bribes and misinformation in order to try and help political candidates win votes around the world.
  • The saga is significant because of the way the harvested data might have been used. It was allegedly utilized to direct messages for political campaigns supported by Cambridge Analytica, most notably Trump's election victory and the Brexit vote.

Cambridge Analytica is in the midst of a media firestorm after an undercover sting operation caught senior executives boasting about psychological manipulation, entrapment techniques and fake news campaigns.

Alongside social media giant Facebook, the London-based elections consultancy is at the center of an ongoing dispute over the alleged harvesting and use of personal data. The allegations have heightened concerns over whether such data was then used to try and influence the outcome of the 2016 U.S. presidential election and the Brexit vote.

Both companies deny any wrongdoing.

What happened in the undercover operation?

In an explosive expose broadcast by Britain's Channel 4 News on Monday, senior executives at Cambridge Analytica, including its CEO Alexander Nix, were caught on camera suggesting the firm could use sex workers, bribes and misinformation in order to try and help political candidates win votes around the world.

Cambridge Analytica, however, has claimed that the reporters tricked the company, and that it never had any intention of carrying out the scenarios discussed.

The news channel's reporter posed as a representative of a wealthy Sri Lankan family looking to gain political standing. While executives initially denied they used "entrapment," after several meetings with the reporter, they put forward some tactics they could use.

How did this initially come to light?

The Channel 4 News investigation, broadcast Monday, followed articles published over the weekend by the New York Times and U.K. newspaper The Observer. The reports sought to outline how the data of millions of Facebook profiles ended up being given to Cambridge Analytica.

Academic Aleksandr Kogan and his company Global Science Research created an app called "thisisyourdigitallife" in 2014. Users were paid to take a psychological test and the app collected the data. It also gathered data on a person's Facebook friends, according to the reports.

Cambridge Analytica whistleblower Christopher Wylie attends an event at the Frontline Club on March 20, 2018 in London, England.
Jack Taylor | Getty Images
Cambridge Analytica whistleblower Christopher Wylie attends an event at the Frontline Club on March 20, 2018 in London, England.

In this way, 50 million Facebook profiles were mined for data. Kogan then shared this with Cambridge Analytica, which allowed the firm to build a software solution to help influence choices in elections, according to whistleblower Christopher Wylie, who revealed the alleged practices to both newspapers.

Wylie claimed the data sold to Cambridge Analytica was then used to develop "psychographic" profiles of people and deliver pro-Trump material to them online.

Cambridge Analytica has denied any of this data was used in connection to the Trump campaign.

How has Facebook responded?

Facebook has said that while the data was obtained by Cambridge Analytica legitimately, it claimed that Kogan "lied" to the social media platform and violated its policies in transferring the data.

Facebook banned Kogan's app in 2015 and ordered all parties he had given data to, including the consultancy, to destroy it. Recent reports surfaced suggesting that this data was not destroyed. Nonetheless, Cambridge Analytica argues it did delete the data when it was told to.

"The entire company is outraged we were deceived. We are committed to vigorously enforcing our policies to protect people's information and will take whatever steps are required to see that this happens," Facebook said in a statement released Tuesday.

The social media giant added its senior executives would continue to "work around the clock to get all the facts."

Although CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg have yet to speak publicly about the allegations, the social media company is expected to share more in briefs with congressional committees this week.

Why does this story matter?

The saga is significant because of the way the harvested data might have been used. It was allegedly utilized to direct messages for political campaigns supported by Cambridge Analytica, most notably Trump's election victory and the Brexit vote.

Nonetheless, the role that marketing — or Cambridge Analytica — might have had to do with either of those political outcomes is not known. Cambridge Analytica has since denied the allegations made in the New York Times and Observer reports.

A general view of the offices of Cambridge Analytica (CA) in central London, as the data watchdog is to apply for a warrant to search computers and servers used by CA amid concerns at Westminster about the firm's activities.
Kirsty O'Connor | PA Images via Getty Images
A general view of the offices of Cambridge Analytica (CA) in central London, as the data watchdog is to apply for a warrant to search computers and servers used by CA amid concerns at Westminster about the firm's activities.

The Channel 4 News investigation featured undercover footage of Cambridge Analytic a's Nix claiming he met with Trump "many times" and that the company was largely responsible for a vast amount of the Trump campaign's activity in 2016.

"We did all the research, all the data, all the analytics, all the targeting… We ran all the digital campaign, the television campaign, and our data informed all the strategy," he said.

Speaking to CNBC in Hong Kong at the Credit Suisse Asian Investment Conference, former White House Chief of Staff Reince Priebus said he wasn't sure about the accuracy of some of the claims about a data analytics firm and its influence on the U.S. presidential election.

What happens next?

U.S. senators have urged Facebook boss Mark Zuckerberg to testify before Congress about how the social media giant will protect its users. Meanwhile, in the U.K., Zuckerberg has been summoned by the chairman of a parliamentary committee in order to explain the "catastrophic failure" to lawmakers.

The head of the European Parliament has also said it will carry out an investigation to see whether data was misused.

Alexander Nix, CEO of Cambridge Analytica, center, arrives at the offices of Cambridge Analytica in central London, Britain, March 20, 2018.
Henry Nicholls | Reuters
Alexander Nix, CEO of Cambridge Analytica, center, arrives at the offices of Cambridge Analytica in central London, Britain, March 20, 2018.

Alexander Nix, CEO of Cambridge Analytica, was suspended on Tuesday following Channel 4 News' undercover investigation.

"In the view of the board, Mr Nix's recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation," the embattled company said in a statement.

Cambridge Analytica said it would proceed to carry out a full and independent investigation following the reports.

— CNBC's Arjun Kharpal and Anita Balakrishnan contributed to this report.