Spit in a tube and, for about $100, discover secrets held by your DNA. That was the promise of 23andMe, a direct-to-consumer genetic-testing company. It proved popular—more than 15m customers coughed up to receive tailored reports. Insights ranged from the banal (there is a 48% chance you have freckles) to the potentially helpful (you have an increased risk of type-2 diabetes). Ultimately, though, the venture was unprofitable. On March 23rd the firm filed for bankruptcy.
Why 23andMe folded is no great mystery. The company’s market value had been languishing at less than 5% of the $5.8bn high it reached in 2021. Its testing services were struggling. Customers have only one genome and are therefore likely to hand over their cash only once. The service revealed family skeletons: one in four users surveyed by YouGov, a pollster, said that the test uncovered a close relative they did not know about. Attempts to roll out health-testing subscriptions, including blood assessments and analysis by a clinician, failed. The firm’s aspirations of becoming a drugmaker fell flat. To top it all, the firm suffered a data breach in 2023.
However, the fate of 23andMe’s genetic data is less clear. In May the firm plans to auction off the records of millions of customers, alongside other assets. Regulators and spitters are fretting about who the buyer might be. Rob Bonta, California’s attorney-general, waded in to remind users that they could still delete their data. The day after 23andMe announced its bankruptcy, its website struggled to cope with the surge in traffic.
Much will depend on the buyer. Such a trove of data may be put to good use rather than a nefarious one. The firm “did an incredible thing in that they got people to pay to participate in research”, says Jonathan LoTempio of the University of Pennsylvania. Hundreds of academic studies have drawn on 23andMe data.
But there is no guarantee of a positive outcome. Although 23andMe says that “any buyer will be required to comply with applicable law with respect to the treatment of customer data”, there are few, if any, such privacy laws, according to Sara Gerke of University of Illinois. Federal health-privacy laws do not cover 23andMe. State rules are patchy.
One hope is that the courts will intervene. Bankruptcy judges are able to appoint an ombudsman to recommend how best to protect users’ privacy. Yet there will be a conflict: maximising value to creditors seems likely to run up against any desire to ensure users’ privacy, says Laura Coordes of Arizona State University. And, she adds, an ombudsman would be only an adviser, without the final say over what happens to the data—much like those who once spat in a tube.■
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