State AG Sounds Alarm Over Sensitive Data Privacy

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Genetic testing giant 23andMe has filed for Chapter 11 bankruptcy protection, leaving millions of customers wondering what will happen to their sensitive DNA data as the company seeks a buyer amid financial collapse.

Key Insights

23andMe filed for Chapter 11 bankruptcy protection with assets and liabilities between $100-500 million, seeking to maintain operations during the sale process.
Co-founder Anne Wojcicki resigned as CEO but plans to pursue acquiring the company as an independent bidder.
California Attorney General Rob Bonta issued an urgent consumer alert advising customers to consider deleting their genetic data and biological samples.
The company recently settled a $30 million lawsuit related to a data breach affecting 6.9 million customers, adding to its financial troubles.

Financial Collapse and Leadership Changes

23andMe initiated voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Eastern District of Missouri. The company listed assets and liabilities between $100 million and $500 million while securing a $35 million debtor-in-possession financing commitment to maintain operations throughout the bankruptcy process. This development follows months of mounting financial pressure, including a 40% workforce reduction announced last November as the company struggled to maintain profitability.

In a significant leadership shakeup, co-founder Anne Wojcicki stepped down as CEO. According to Wojcicki, she resigned “so (she) can be in the best position to pursue the company as an independent bidder.” Chief Financial Officer Joe Selsavage has assumed the role of interim CEO as the company navigates the bankruptcy proceedings and potential sale. These changes come at a critical juncture, with the once-pioneering genetic testing company’s valuation estimated at approximately $50 million.

Data Privacy Concerns Take Center Stage

The bankruptcy filing has intensified concerns about the security and future of millions of customers’ genetic information. California Attorney General Rob Bonta issued an urgent consumer alert regarding the “trove of sensitive consumer data 23andMe has amassed.” The alert specifically highlights the rights Californians have to request deletion of their genetic data under both the Genetic Information Privacy Act and California Consumer Protection Act.

Customers concerned about their genetic information can follow specific steps to delete their data. The process includes logging into their accounts, accessing settings, downloading any desired data before deletion, and confirming the deletion request via email. Additionally, users can request the destruction of stored saliva samples and DNA by adjusting preferences in their account settings. Many privacy advocates are encouraging customers to act quickly before any potential change in ownership.

Recent Troubles Compound Financial Woes

The bankruptcy filing follows a string of challenges for the company, most notably a recent $30 million settlement related to a data breach that affected approximately 6.9 million customers. This breach significantly damaged consumer trust in the company’s ability to safeguard sensitive genetic information. Despite these concerns, 23andMe maintains that there are “no changes to how customer data is stored, managed, or protected” during the bankruptcy proceedings.

For customers who provided their genetic information to the company, experts recommend reviewing the detailed instructions provided by the California Attorney General’s office about how to delete their data. The coming weeks will be critical as the bankruptcy court evaluates potential buyers and determines the future of this once-revolutionary genetic testing company. While 23andMe has pledged to maintain data security, the uncertainty surrounding its future has left many customers questioning whether their most personal information—their genetic code—remains in safe hands.