Genetic testing giant 23andMe has filed for Chapter 11 bankruptcy protection, raising alarms about the fate of millions of consumers’ sensitive DNA data while its co-founder steps down to potentially buy back the struggling company.
Quick Takes
- 23andMe filed for Chapter 11 bankruptcy protection while seeking to sell its assets valued at approximately $50 million.
- Co-founder Anne Wojcicki resigned as CEO 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.
- The company recently settled a $30 million lawsuit over a data breach affecting 6.9 million customers.
- 23andMe insists customer data remains secure and services will continue during the bankruptcy process.
Financial Collapse and Customer Data Concerns
The once-pioneering genetic testing company 23andMe has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Eastern District of Missouri. The filing comes after months of financial struggles, including a massive workforce reduction that saw 40% of employees laid off last November. In court documents, the company listed assets and liabilities between $100 million and $500 million, highlighting the depth of its financial troubles. To maintain operations during the bankruptcy process, 23andMe has secured a $35 million debtor-in-possession financing commitment.
California Attorney General Rob Bonta has taken immediate action by issuing a consumer alert about the vast repository of genetic information held by the company. “California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” Bonta 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.”
Leadership Changes and Sale Prospects
In a significant development, co-founder and CEO Anne Wojcicki has stepped down from her leadership position. According to Wojcicki, she resigned “so I can be in the best position to pursue the company as an independent bidder.” This unusual move suggests she may be positioning herself to buy back control of the company she helped create. In the interim, CFO Joe Selsavage has been appointed to serve as the acting CEO while the bankruptcy proceedings and potential sale move forward.
The bankruptcy filing follows a challenging period for the company, which recently agreed to settle a $30 million lawsuit related to a significant data breach that exposed information from approximately 6.9 million customers. This security incident further damaged consumer trust in the company’s ability to safeguard the highly sensitive genetic information in its possession. Despite these challenges, 23andMe maintains that its services will continue uninterrupted throughout the bankruptcy process.
Customer Rights and Data Protection
The California Attorney General’s office has issued comprehensive guidance for consumers concerned about their genetic information. Under California’s Genetic Information Privacy Act (GIPA) and the California Consumer Protection Act (CCPA), residents have legal rights to request the deletion of their genetic data and biological samples. The Attorney General specifically warned about the “trove of sensitive consumer data 23andMe has amassed” and urged customers to consider taking action to protect their information.
For concerned customers, the deletion process involves logging into their 23andMe accounts, accessing settings, downloading any desired data before deletion, and confirming the deletion request via email. Additionally, customers can specifically request the destruction of stored saliva samples and DNA by changing preferences in their account settings. The company insists there are “no changes to how customer data is stored, managed, or protected” during the bankruptcy process, but many privacy advocates remain skeptical about the long-term security of this sensitive information.
Sources:
- 23andMe files for bankruptcy as California AG urges customers to delete data
- 23andMe users told to consider deleting their data by California attorney general as the company files for bankruptcy
- Attorney General Bonta Urgently Issues Consumer Alert for 23andMe Customers
- 23andMe Bankruptcy Stock Price Falls Penny Territory Data Warning
