23andMe Files for Bankruptcy, Raising Concerns Over Genetic Data Sales

Genetic testing company 23andMe has filed for Chapter 11 bankruptcy, leaving the fate of millions of customers’ genetic information uncertain.

The company, once valued at nearly $6 billion, has faced significant financial and legal challenges following a massive data breach in 2023 that exposed the personal information of nearly seven million users, as noted by Reuters.

The breach, which lasted five months, allowed hackers to access sensitive customer data, including health-related genetic information, birth years, and geographic locations.

Following the incident, 23andMe has been hit with over 50 class-action lawsuits and arbitration claims from around 35,000 individuals. The company is seeking bankruptcy protection partly to manage the legal fallout, as it may not have the funds to cover potential damages, as reported by 404 Media.

The situation has become so dire that California Attorney General Rob Bonta issued a privacy alert urging 23andMe users to delete their data and request the destruction of their genetic samples. “Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data,” he said.

This stark warning highlights how vulnerable consumer genetic data becomes when entrusted to a struggling corporation. While 23andMe claims in customer communications that “your data remains protected” and that the bankruptcy filing “does not change how we store, manage, or protect customer data,” privacy experts are sounding alarms.

The company’s bankruptcy filing reveals it owes money to various pharmaceutical companies, AI firms, and health insurers – exactly the types of organizations that might be interested in acquiring a massive genetic database, as noted by 404 Media.

This isn’t just theoretical – other DNA companies have already set troubling precedents. GED Match, which originally promised to protect user data, was sold to a forensic genetics company that works with the FBI, as reported by 404 Media.

Additionally, police now routinely use commercial DNA databases to identify suspects, raising concerns about genetic surveillance.

The fundamental problem is that DNA data isn’t like other personal information – it can’t be changed if compromised, and it reveals information not just about you but about your relatives too.

Once you’ve handed over your genetic material to a company, you lose control over how it might be used in the future, especially if that company goes bankrupt and sells its assets.

23andMe maintains that any buyer would have to “comply with applicable law with respect to the treatment of customer data.” However, as privacy advocates point out, U.S. laws offer minimal protection against the commercialization or sharing of genetic information, as noted by 404 Media.

The company’s own terms of service have changed over the years to allow more data sharing with pharmaceutical partners.

For the 15 million people who have used 23andMe’s services, the message is clear: your most personal data could soon belong to someone else. While the company continues operating during bankruptcy proceedings, concerned customers are rushing to delete their accounts.

The 23andMe bankruptcy serves as a cautionary tale about the risks of the genetic testing industry, where sensitive biological data becomes corporate property with an uncertain future.

As the company prepares for a fire sale, millions are left wondering – who will own their DNA tomorrow, and what will they do with it?