DNA testing site 23andMe files for bankruptcy protection

23andMe, a well-known company that provides DNA testing services, has recently filed for bankruptcy protection. This means that the company is seeking legal assistance to help manage its financial difficulties. Along with this announcement, Anne Wojcicki, the co-founder and CEO of 23andMe, has resigned from her position immediately. The company is now in the process of looking for a buyer while continuing its operations under the supervision of a court. They have reassured customers that there will be no changes in how they store, manage, or protect customer data during this time. However, the Attorney General of California, where 23andMe is based, has issued a consumer alert advising customers to delete their data from the site due to the company's reported financial distress. 23andMe's saliva-based DNA testing kits were once highly regarded by customers and investors alike, contributing to the company's valuation soaring to approximately $6 billion. Founded in 2006, 23andMe went public in 2021 but has struggled to turn a profit since its inception. In September, the company settled a lawsuit that alleged it failed to adequately protect the privacy of nearly seven million customers whose personal information was compromised in a data breach that occurred in 2023. Hackers managed to access sensitive information such as family trees, birth years, and geographic locations by exploiting customers' old passwords. Fortunately, the stolen data did not include any DNA records, according to the company's statements. Following the settlement, 23andMe had to make significant layoffs, cutting 40% of its workforce. Joe Selsavage, the company's finance chief, has stepped in as the interim chief executive while Wojcicki remains on the board. She had previously attempted to take the company private but was not receptive to a third-party acquisition. 23andMe, which once enjoyed endorsements from high-profile celebrities like Oprah Winfrey, Eva Longoria, and Snoop Dogg, has faced challenges in redefining its business model. Customers often felt that they did not receive enough value after paying for their DNA reports, and an attempt to launch a subscription service was unsuccessful. The company's efforts to leverage its extensive data for drug development also fell short. Last summer, all of the company's directors, except for Wojcicki, announced their resignations after not receiving a satisfactory buyout offer from her. In a statement released on Sunday, Mark Jensen, the chair of 23andMe's board, emphasized the company's commitment to safeguarding customer data and being transparent about data management in the future. He noted that this commitment would be a crucial factor in any potential transaction. However, this assurance may not alleviate the concerns of some users regarding the fate of their DNA information shared with the company. In the UK, DNA data is classified as special category data under data protection laws, which provides legal protections in the event of a company going bankrupt or changing ownership. When another DNA testing company, Atlas Biomed, appeared to have ceased operations last year, many customers were left uncertain about the implications for their data. Professor Carissa Veliz, the author of 'Privacy is Power,' previously stated that DNA data is arguably the most valuable personal information one can possess. She highlighted that sharing DNA data also involves sharing the genetic information of one's parents, siblings, children, and even distant relatives who did not consent to that sharing. This raises significant ethical and privacy concerns that customers must consider.