23andMe Faces Lawsuit Over Genetic Data Sales Amid Bankruptcy
This week, 27 states along with the District of Columbia filed a lawsuit against 23andMe in the U.S. Bankruptcy Court in the Eastern District of Missouri. The main contention is that the genetic testing company lacks the right to sell its clients’ genetic information to whoever is willing to pay the most.
The states argue that there should be informed consent from each affected consumer before any genetic identity data is sold or transferred. They aim for the bankruptcy court to establish limits on how deeply genetic testing companies can sell and share such private information.
The lawsuit indicates a strong opposition to these sales, emphasizing that explicit consent from individuals is necessary before any of their personal data is exploited.
State attorneys general from various regions, including Arizona, Florida, and New York, among others, are behind this legal action.
New York Attorney General Letitia James expressed concerns, stating, “23andMe cannot auction the personal genetic information of millions of people without their consent.” She added that trust is vital and customers deserve to know what becomes of their information.
A spokesperson for 23andMe responded by downplaying the lawsuit’s validity, claiming the sales process complies with their Privacy Policy and relevant laws. They insist that bidders will adhere to these protocols and maintain the same rights and protections for customers after the sales.
Remaining bidders, Regeneron Pharmaceuticals and TTAM Research Institute, voiced their commitment to respecting the company’s Privacy Policy and plan to continue operating 23andMe as usual.
In May, Regeneron had reportedly emerged as a successful bidder with a bid of $256 million for 23andMe’s assets. Following that, a new auction took place, where the TTAM Research Institute bid $355 million.
23andMe initiated Chapter 11 bankruptcy in March as part of a process to sell its business. The company’s bankruptcy filings suggest that its assets could be valued between $100 million and $500 million, with corresponding liabilities estimated in that same range.
Founded in 2006, 23andMe has undergone significant changes as it navigates these financial upheavals.
