California Attorney General Reminds 23andMe Customers of Their Data Rights Amid Financial Struggles

Amid the financial turmoil surrounding biotech company 23andMe, California’s Attorney General, Rob Bonta, has issued a crucial reminder to the company’s customers about their rights over their genetic data. These rights are safeguarded under California’s Genetic Information Privacy Act (GIPA) and the California Consumer Protection Act (CCPA). This reminder comes in the wake of the company’s financial struggles and the uncertainty surrounding its future. Here’s a breakdown of the key developments surrounding the company and what these legal protections mean for consumers.

Events

On March 21, 2025, California Attorney General Rob Bonta issued a public advisory regarding 23andMe, a company known for offering direct-to-consumer genetic testing. This advisory emphasized that California residents have legal rights under both the Genetic Information Privacy Act (GIPA) and the California Consumer Protection Act (CCPA). These laws allow customers to control what happens to their genetic data, including the ability to delete it entirely from the company’s records, revoke permission for its use in research, or even destroy their DNA test sample.

This reminder comes on the heels of a troubling report from 23andMe, which disclosed that the company was facing severe financial distress. The report raised concerns about the company’s future and its ability to remain operational. Just days later, on March 23, 2025, 23andMe filed for Chapter 11 bankruptcy protection. This filing marks the beginning of a process to sell off its assets in hopes of salvaging its value.

Mark Jensen, the Chair of the Special Committee of the Board of Directors, released a statement that after evaluating all available options, a court-supervised sale of the company’s assets was deemed the best strategy to maximize the business’s value. Furthermore, on March 24, 2025, Anne Wojcicki, the CEO and co-founder of 23andMe, announced her resignation from her position. She also stated her intentions to be an independent bidder for the company’s ownership.

This chain of events follows a rocky period for the company. After an IPO in 2021 that saw it valued at up to $6 billion, 23andMe struggled to attract investors, failed to turn a profit, and experienced a dramatic decline in market value. The situation worsened in 2024 when the company faced a data breach affecting nearly 7 million users, including 6.4 million in the U.S. The company agreed to a $30 million settlement with the victims of this breach while denying any wrongdoing.

Further restructuring efforts saw 40% of 23andMe’s workforce laid off by the end of 2024, and the company agreed to implement stronger security measures, such as multi-factor authentication (MFA) and annual security audits.

In the midst of all this turmoil, 23andMe attempted to reassure its customers. Despite its bankruptcy filing, the company stated that it remains operational and that there are no changes to how it stores, manages, or protects customer data.

What Undercode Says:

The financial struggles of 23andMe are a vivid illustration of the risks associated with data-driven businesses in an evolving regulatory environment. Despite the company’s setbacks, the reminder from California’s Attorney General underscores the increasing importance of consumer rights when it comes to personal and sensitive information. Genetic data, once regarded as the ultimate form of personal information, holds immense value but also significant risks in the wrong hands. California’s Genetic Information Privacy Act (GIPA) is one of the few state-level laws providing consumers with a clear pathway to control their genetic information.

This advisory also speaks to a larger trend in consumer protection laws. With companies like 23andMe collecting highly sensitive information, it is crucial that consumers have an effective mechanism for managing their privacy. The right to delete, revoke, and destroy one’s genetic data isn’t just a consumer protection issue—it is also a critical step towards empowering individuals in managing their digital identities in a world increasingly dominated by biometric data collection.

However, the situation at 23andMe raises questions about how businesses in the data-driven sector should prepare for the unforeseen consequences of data management and security breaches. The company’s failure to sustain profitability after its IPO, coupled with the ongoing security breaches and restructuring efforts, points to a fundamental flaw in the company’s business model. While it initially seemed to promise huge profits from genetic data testing, the reality of managing this type of personal information has proven far more complicated, especially when consumer trust is eroded by events like data breaches.

Furthermore, the company’s filing for Chapter 11 bankruptcy and the resignation of its CEO reflect the growing pressure on firms that fail to innovate or maintain their customer base. While the sale of assets through bankruptcy may salvage some value for shareholders, it is unlikely to offer long-term stability or restore consumer confidence in the company. This suggests a larger problem within the biotech and health data industries: as much as they thrive on innovative technology, they are also vulnerable to financial instability if they cannot secure a loyal customer base and robust data security measures.

What this situation also highlights is the increasing role of state-level regulations in protecting consumers. With California setting the example, other states may follow suit, creating a patchwork of regulations that businesses in the data-driven sector must navigate. This could lead to more uniform protections for consumers nationwide, ensuring that individuals have the legal tools to safeguard their most personal information, regardless of where they live.

Fact Checker Results:

Accuracy of the Advisory: The Attorney General’s reminder about consumer rights under California’s GIPA and CCPA is in line with existing legal protections for genetic data in California. This affirms the legal framework that consumers have to control their data.
Financial Situation: 23andMe’s financial struggles and Chapter 11 filing are accurate and well-documented, reflecting the company’s ongoing issues with profitability and investor confidence.
Security and Data Breach: The company’s acknowledgment of the 2023 data breach and the settlement with affected users is verified, along with the efforts to enhance security protocols post-breach.

References:

Reported By: https://www.infosecurity-magazine.com/news/california-23andme-data-rights/
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