Cambridge Analytica had its London headquarters raided by officials from Britain’s data watchdog after being accused of improperly using data on behalf of political clients.
The Facebook data of up to 87 million people was improperly shared with the political consultancy.
The social network giant has reportedly declined to comment.
In a statement, the firm said: “Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the company’s 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.
“Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, which as a view is now fully supported by Mr Malins’ report [independent investigator Julian Malins], the siege of media coverage has driven away virtually all of the company’s customers and suppliers.
“As 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.”
The announcement by Cambridge Analytica comes just 24 hours after Facebook chief Mark Zuckerberg announced the social media platform would create a new tool to allow people to clear their history.
The tool will allow users to delete the data the network holds on them from other websites and apps.
The company collects data from websites that use like buttons and almost invisible Facebook pixels to track browsing and transaction behaviour, and from apps that use Facebook details to log in to them. In a post on Facebook, Mr Zuckerberg said users would even be able to opt out of having this information stored in their account. He said he expected to roll out more similar tools in the future.
Facebook also announced their plans yesterday to introduce a dating feature to the platform.
The SNP have recently been forced to defend their dealings with Cambridge Analytica, with the party admitting it sought help for its election campaigning from the firm and met with officials in London.
Cambridge Analytica has declared it has dealt with all political parties, including Theresa May’s Conservative Government.