California’s Attorney General is warning 15 million Americans to delete their genetic data from 23andMe as the pioneering DNA testing company files for bankruptcy protection amid plummeting stock values and recent data breaches.
Quick Takes
- California AG Rob Bonta urges 23andMe customers to delete their genetic data due to the company’s financial instability and bankruptcy filing
- 23andMe’s stock price has crashed from over $320 in 2021 to less than $2 today, forcing layoffs and the closure of its drug development division
- The company suffered a major data breach last year affecting 6.9 million customers and recently settled a related lawsuit for $30 million
- California law gives consumers the right to have their genetic data and physical samples permanently deleted
- 23andMe’s privacy policy allows for the transfer of personal data if the company is sold, raising significant privacy concerns
Genetic Privacy at Risk as 23andMe Files for Bankruptcy
The once-promising genetic testing company 23andMe has officially filed for Chapter 11 bankruptcy protection, prompting California Attorney General Rob Bonta to issue an urgent warning to consumers. The company, which holds detailed genetic information on approximately 15 million customers, has seen its fortunes plummet since its heyday. What started as a revolutionary at-home DNA testing service priced at around $200 per kit has devolved into a cautionary tale about privacy risks in the digital age. The bankruptcy filing comes after a security breach and failed business expansions that have left customers’ sensitive genetic information potentially vulnerable.
The financial collapse of 23andMe has been swift and dramatic. The company was valued at $6 billion in 2020 but has experienced a catastrophic decline since going public in 2021. Stock prices have crashed from over $320 in February 2021 to less than $2 today – a staggering 99% loss in value. The company already laid off 40% of its workforce last November and announced the complete closure of its drug development arm, which had been pitched to investors as a major growth avenue. Despite securing $35 million in debtor-in-possession financing, the company listed assets and liabilities between $100 million and $500 million in its bankruptcy filing.
California Attorney General Issues Consumer Alert
Attorney General Bonta’s warning highlights the risks posed by 23andMe’s uncertain future. His office issued a formal consumer alert focusing on the “trove of sensitive consumer data 23andMe has amassed” and the potential privacy implications of the bankruptcy. Under California law, consumers have specific rights regarding their genetic information, including the ability to have their data permanently deleted and any physical samples destroyed. These protections are outlined in both the California Genetic Information Privacy Act and the broader California Consumer Protection Act.
“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,” Bonta said in a statement Friday.
The concerns are not merely theoretical. 23andMe suffered a significant data breach in October 2023 that exposed the personal information of 6.9 million customers – nearly half of its total user base. The company recently settled a lawsuit related to this breach for $30 million. Additionally, 23andMe’s privacy policy specifically allows for the transfer of personal information if the company is sold, raising questions about what might happen to this sensitive data during bankruptcy proceedings.
How to Protect Your Genetic Data
For concerned customers, Attorney General Bonta has provided specific instructions on how to remove personal data from 23andMe’s systems. Users need to log into their accounts, access the “settings” menu, navigate to the data section, and select the option to “permanently delete data.” The process requires email verification to complete. Deleting a user’s personal information is particularly important given the sensitive nature of genetic information, which can reveal details about health conditions, family relationships, and ancestry that could potentially be misused if accessed by unauthorized parties.
23andMe has responded to these concerns by stating there are “no changes to how customer data is stored, managed, or protected” during the bankruptcy process. The company maintains it is committed to safeguarding customer data and ensuring transparency in data management.
