Big news hit the world on Monday, March 25, as genetic testing and biotechnology company 23andMe filed for Chapter 11 bankruptcy.
Founded in 2006, the company became popular among millions of Americans who sent in saliva samples with the promise of learning about their ancestry and genetic health predispositions.
However, following a class-action settlement from a data breach, the resignation of the entire board of independent directors, layoffs, and its drug development division closure, the firm has experienced business troubles and said it may be looking for a buyer.
“The company intends to continue operating its business in the ordinary course throughout the sale process,” 23andMe said in a statement last week. “There are no changes to the way the company stores, manages, or protects customer data.”
However, others have a different opinion and advise users to immediately delete their data from the site. John Bringardner, head of analytics company Debtwire, told Fox Business that while “any viable bidder will be required to follow all applicable data privacy laws, the laws only do so much to protect your data.”
The 2023 data breach, in which hackers stole the genetic data of nearly 7 million customers, prompted numerous federal and state class action lawsuits.
According to Bringardner, litigation over the 2023 data breach “helped drive up liabilities for 23andMe and force the company into the bankruptcy process it launched today.”
A month before its restructuring, 23andMe agreed to pay $30 million and give three years of security monitoring to settle a lawsuit accusing it of failing to protect the privacy of the millions of customers whose personal information was exposed during the data breach.
“I don’t think they ever built sufficient consent into people sending them information, saying, ‘We’ll do our best to protect it, but we can’t promise,”’ Dr. Arthur Caplan, a professor of bioethics at the NYU Grossman School of Medicine, told ABC News.
“So, what you might have thought was safe and secure is not, as the bankruptcy is making clear now, but hasn’t been from the beginning,” he added.
The company also said that following court approval, it will work with an independent investment banker to seek offers from interested buyers over 45 days; and that if there are multiple offers, there will be an auction to get the best possible price. Any buyer will need to follow the law regarding how they handle customer data, and the deal will need approval from the relevant government agencies, including those that review business mergers and foreign investments in the U.S., according to the company.
In a press release by Attorney General Bonta, instructing consumers on how to delete their data, “California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” said Attorney General Bonta. “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.”
To Delete Genetic Data from 23andMe:
Consumers can delete their account and per
sonal information by taking the following
steps:
Log into your 23andMe account on their
website.
Go to the “Settings” section of your profile.
Scroll to a section labeled “23andMe Data” at
the bottom of the page.
Click “View” next to “23andMe Data.”
Download your data: If you want a copy of
your genetic data for personal storage, choose
the option to download it to your device before
proceeding.
Scroll to the “Delete Data” section.
Click “Permanently Delete Data.”
Confirm your request: You’ll receive an
email from 23andMe; follow the link in the
email to confirm your deletion request.