23andMe, the DNA testing company that became a household name for its saliva-based ancestry kits, has announced it's filing for Chapter 11 bankruptcy, sparking concerns among its customers about the future of their sensitive genetic data. According to Reuters, demand for their testing kits has dried up, and a damaging data breach in 2023 further eroded the company's reputation and market value.
Former CEO and co-founder Anne Wojcicki, after failing multiple times to take over the company, has stepped down, and in a subsequent move, the company's shares plummeted by 50% to 88 cents. Despite the financial turmoil, 23andMe assured that the bankruptcy process would not influence how it manages or safeguards customer data, even as the company seeks a new buyer. California Attorney General Rob Bonta has expressed his concerns, which mirror those of many of the company's users, about the fate of their genetic data amidst the bankruptcy turmoil, Reuters reported.
As reported by FOX 10 Phoenix, the potential sale of 23andMe throws into question the terms of service agreements with millions of users. Privacy advocates warn that under new ownership, users' genetic information could be subject to different, potentially less protective terms. Jason Kelley of the Electronic Frontier Foundation highlighted this anxiety, stating, "Most of the agreements that you have are with 23andMe and a new company may be able to sort of finagle away from those agreements," according to FOX 10 Phoenix.
In light of these developments, experts encourage users to be proactive about their digital privacy. "It’s very complicated to know what rights the new company will have, what rights you will have," said Kelley. Meanwhile, 23andMe has stated that any buyer would need to comply with applicable laws concerning customer data treatment. As a cautionary step, users can access their accounts on the 23andMe website, where they will find information on how to delete their genetic information before potential changes in access occur.
The bankruptcy filing follows on the heels of a significant setback for the company: a large-scale data breach that exposed the personal information of nearly seven million customers. This incident not only raised alarms over privacy concerns but also had long-term implications for customer trust and the company's bottom line. In the end, 23andMe agreed to a $30 million settlement in a lawsuit related to the breach. Despite these challenges, 23andMe has stated that it has obtained $35 million in financing to continue operations as it undergoes the sale process, as per information obtained by FOX 10 Phoenix.
