23andMe Bankruptcy Sparks Fears Over Sale of Genetic Data
Millions of Americans who sent their DNA to 23andMe—hoping to discover long-lost relatives or assess health risks—now face the unsettling prospect that their genetic data could be sold to the highest bidder. As the company moves through bankruptcy proceedings, it sets up a major test of legal safeguards around privacy and data security.
Genetic Data Up for Auction
23andMe has scheduled a May 14 auction to sell its assets, which include genetic profiles from over 15 million customers. Founded in 2006, the company claims in court filings that its database represents “one of the world’s largest crowdsourced platforms for genetic research.”
The auction highlights a little-discussed aspect of corporate bankruptcy: customer data is often treated as a valuable asset that can be sold. Similar situations have occurred with patient records from bankrupt hospitals or customer data from failed retail chains.
Despite legal measures meant to protect sensitive information, the idea of genetic data being sold has heightened long-standing concerns about privacy and security in the DNA testing industry.
Growing Public Concern
News of 23andMe’s bankruptcy sparked a wave of concern on social media, with users questioning what would happen to their personal and family data. Worries were further amplified by a 2023 data breach that compromised the information of 7 million customers.
Consumer Warnings & Deletion Requests
In response, a 23andMe spokesperson reassured customers that they can delete their data directly through their accounts—without needing to contact customer service. The company also issued a statement emphasizing that its privacy policies remain unchanged, and that any buyer must comply with applicable privacy laws.
“Our users’ privacy and data are important considerations in any transaction, and we remain committed to transparency about how data is managed.” — 23andMe
On Monday, attorneys general in California and Connecticut issued consumer alerts, advising 23andMe users on how to delete their genetic information. Amid this, some customers reported that the company's website and app were running slowly, likely due to a surge in deletion requests.
Connecticut Attorney General William Tong made it clear that authorities are monitoring the situation closely:
“We are watching this bankruptcy filing closely and expect to be actively engaged to ensure sensitive records are protected and 23andMe is held accountable.”
Privacy Risks in Bankruptcy Sales
In court documents, 23andMe stated that bidders must confirm in writing that they comply with the company’s privacy policies—but those policies do not restrict the transfer of personally identifiable information in the event of a bankruptcy, merger, acquisition, or sale of assets.
While the scale of 23andMe’s genetic database is unprecedented, the sale of customer data in bankruptcies is common practice. This situation underscores the tension between corporate obligations to maximize asset sales and the responsibility to protect consumers' private information.