23andMe Files for Bankruptcy, Raises Concerns Over User Data

Genetics firm 23andMe, the maker of popular take-home DNA testing kits, has filed for Chapter 11 bankruptcy. This move casts a looming shadow over the extremely sensitive user data it still stores on its servers. Founded almost two decades ago, the company has been struggling with financial woes, failing to effectively monetize its service, which most customers will only buy once. The news comes as a significant blow to the company's leadership, including its co-founder and CEO Anne Wojcicki, who has made several takeover bids, but was recently forced out of her position.

Wojcicki, a die-hard supporter of the company, has resigned, leaving behind a shell of its former self. This development raises concerns over the security of user data and the potential for it to be exploited by other companies. In a "consumer alert" to California residents, the state's attorney general Rob Bonta urged them to take action to protect their data, advising users to delete their information from the website and destroy any samples of genetic material held by the company.

Consumer data is already vulnerable to hacking, as evidenced by a high-profile breach in 2023 that exposed the personal data of nearly seven million customers. This incident severely damaged the company's reputation and raises questions about its ability to protect sensitive user information. The Washington Post columnist Geoffrey Fowler has highlighted the ease with which users can delete their data from the website, suggesting that it is a simple step for individuals to take to protect themselves.

Mass layoffs, including the resignations of most of its governing board, have left the company in tatters. Its share price has plummeted, dropping over 50 percent in value just yesterday. Despite these challenges, 23andMe maintains that everything is under control and promises to continue protecting user data without any changes.

However, experts warn that this may not be enough to prevent a data privacy disaster. "If you gave your data to 23andMe, you also gave the genetic data of your parents, your siblings, your children, and even distant kin who did not consent to that," said Carissa Veliz, a privacy expert with the BBC in November.

Wojcicki remains committed to the company's long-term vision but is now focused on pursuing the opportunity to acquire the assets of 23andMe. "While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company and I intend to be a bidder," she tweeted on Monday.

"Our foundation was the trust and respect of our customers, and they were always the guiding light on how we made decisions," Wojcicki added. "If I am fortunate enough to secure the company's assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide."