As 23andMe plunges into bankruptcy, the Federal Trade Commission is sounding the alarm on what might happen to millions of Americans’ genetic data. If you’ve used this service, you’re probably going to need to take action now – before your data gets sold to the highest bidder.
At a glance:
• 23andMe filed for bankruptcy protection on March 23 due to weak demand for its ancestry testing kits
• FTC Chairman Andrew Ferguson has warned that privacy promises made to consumers must be kept during bankruptcy proceedings
• California Attorney General Rob Bonta has advised customers to delete their genetic data to protect their privacy
• A 2023 data breach exposed personal information of nearly 7 million 23andMe customers over five months
• The company’s privacy policies suggest genetic data could potentially be sold during bankruptcy proceedings
Government Watchdogs Issue Warnings
The Federal Trade Commission is stepping in to protect Americans’ most personal data as ancestry testing company 23andMe navigates bankruptcy proceedings. FTC Chairman Andrew Ferguson addressed these concerns in a strongly-worded letter to the Acting U.S. Bankruptcy Trustee overseeing the company’s Chapter 11 filing.
Ferguson stressed that any potential buyer of 23andMe’s assets must adhere to the company’s existing privacy policies and applicable laws. The intervention comes after the company’s shocking bankruptcy filing on March 23, which raised immediate red flags about the fate of millions of DNA samples.
The company’s financial troubles were compounded by a devastating data breach in 2023 that exposed the personal information of nearly 7 million customers over a five-month period. This security failure severely damaged 23andMe’s reputation at a time when the company was already struggling with declining sales of its DNA testing kits.
California Attorney General Rob Bonta has taken the extraordinary step of advising 23andMe customers to delete their genetic data entirely. So if you’re one of them – now is the time to go in and delete anything they have. And hope for the best…
Privacy Promises Must Be Kept
Chairman Ferguson’s letter makes it clear that the FTC expects 23andMe to honor its commitments regardless of bankruptcy status. “Many Americans are concerned about the impact of a potential sale of their personal data, and I understand those concerns,” Ferguson stated in his letter to bankruptcy officials.
“Consumers should be able to trust that companies will keep their promises, including when it comes to handling of sensitive information,” Ferguson continued. This position reaffirms the FTC’s long-standing commitment to protecting consumer data even as companies restructure or sell assets.
The FTC has previously intervened in similar bankruptcy cases involving RadioShack and XY Magazine to ensure consumer data was protected. In those instances, the agency successfully enforced restrictions on how personal information could be transferred during bankruptcy proceedings.
23andMe’s own privacy statement indicates that its privacy protections should apply continuously, even if data is transferred in bankruptcy proceedings. But whether it holds in court is another story.
