Millions of 23andMe users’ genetic data could be up for grabs – and experts worry it’s a looming privacy nightmare
DNA testing company 23andMe has filed for bankruptcy protection, raising questions about the future of the company and the personal data it holds.
The company says it’s looking for a sale and hopes to continue as a going concern during the process.
The announcement follows the resignation of CEO and co-founder Anne Wojcicki after pushing for a buyout that was rejected by the board. She said she now hopes to bid for the company independently.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” said Mark Jensen, chair and member of the Special Committee of the Board of Directors.
“We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.”
But there’s uncertainty about the data that the company holds – the company currently has around 15 million customers, who have mailed in saliva kits to have their genetic makeup analyzed. Many are concerned that the data could be sold off to data brokers or for targeted advertising.
“The data itself is one of the core assets, and technically that would be of interest to a buyer. However, the terms of use in which that data was provided remain, so it would be up to the bankruptcy court and associated trustees to ensure that those rights are maintained and controlled,” commented Jack Berkowitz, chief data officer at Securiti.
“Ideally, the court appointed trustee has a view and understanding of the sensitivity of the data, the corporate and legal constraints, and the regulatory implications. We have seen such sensitivity around high profile bankruptcies before, such as when FTX went into receivership.”
23andMe facing intense data protection scrutiny
The company’s handling of personal data is already under investigation by the UK Information Commissioner’s Office (ICO) and the Office of the Privacy Commissioner of Canada, following a data breach that was reported in October 2023.
Earlier this month, the ICO issued a notice of intent to fine the company £4.59 million ($5.94m) along with a preliminary enforcement notice.
“We are aware that 23andMe has filed for Chapter 11 bankruptcy in the US to facilitate a sale process. We are monitoring the situation closely and are in contact with the company,” said ICO deputy commissioner – regulatory supervision Stephen Bonner.
“As a matter of UK law, the protections and restrictions of the UK GDPR continue to apply and 23andMe remains under an obligation to protect the personal information of its customers.”
In many parts of the world, users have the right to request the removal of their personal data, and California attorney general Rob Bonta is urging them to do just that.
“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” he said.
“Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.”
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