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23andMe Sued by 27 States Over Sale of Sensitive Genetic Data Without Customer Consent
Twenty-seven states and the District of Columbia filed a lawsuit in the U.S. Bankruptcy Court in the Eastern District of Missouri to prevent 23andMe from selling personal genetic data without obtaining customer consent. The lawsuit follows a pending deal in which Regeneron Pharmaceuticals, a biotechnology company, is seeking court approval to acquire 23andMe and its assets. The states argue that the company must obtain explicit permission from each customer before selling their data.
Genetic-Testing Company Dismisses the Lawsuit as Lacking Merit, Insisting Purchasing Deals Comply With Privacy Policies
23andMe gained prominence as a genetic-testing company offering kits that allow customers to explore their ancestry and assess their risk for certain diseases and traits, according to its website. Customers submit saliva samples by mail and receive DNA analyses that include ancestry and health reports.
Once valued at $6 billion in 2021, the company experienced financial difficulties and filed for bankruptcy in March. CEO Anne Wojcicki resigned shortly after the filing. In its bankruptcy filing, California-based 23andMe stated that it planned to auction the business following a decline in consumer demand and a 2023 data breach that exposed genetic and personal information of millions of users. The proposed sale includes over 15 million DNA profiles collected through its direct-to-consumer saliva-testing kits.
“23andMe cannot auction millions of people’s personal genetic information without their consent,” New York Attorney General Letitia James, a Democrat, said in a statement. “New Yorkers and many others around the country trusted 23andMe with their private information and they have a right to know what will be done with their information.”
23andMe stated that the states’ claims lack merit and asserted that the sale complies with its privacy policies and applicable law. “Customers will continue to have the same rights and protections in the hands of the winning bidder,” the company said. Regeneron announced last month its intention to acquire 23andMe for $256 million. The company stated it would follow 23andMe’s existing privacy policies and applicable law, process all customer data in line with current consents, terms of service, and privacy notices, and implement security measures designed to protect the data.
California Opposes 23andMe’s Asset Sale Over Genetic Privacy Concerns Amid Legal Challenges and a Competing $305M Bid
In a separate court filing on Monday, the office of California Attorney General Rob Bonta stated that the state opposes the proposed sale of 23andMe’s assets, arguing that it would violate California’s laws governing the transfer of sensitive genetic material. The objection adds further scrutiny to the pending acquisition amid growing concerns over privacy and data protection.
Last week, 23andMe informed a U.S. bankruptcy judge of its intention to reopen bidding on its assets after receiving a $305 million offer from co-founder Anne Wojcicki. The new bid exceeds the earlier offer from Regeneron and may alter the course of the sale process.
The company has previously faced legal challenges related to data protection. In January 2024, a class-action lawsuit was filed in federal court in the Northern District of California following a data breach that reportedly targeted customers of Chinese and Ashkenazi Jewish descent. The lawsuit accused 23andMe of failing to adequately safeguard user information and of not promptly notifying affected customers.
The current lawsuit centers on the sale of customers’ personal and genetic data. According to court documents, 23andMe holds phenotype data linked to raw genetic codes for more than 15 million individuals. Plaintiffs argue that such sensitive information, once compromised, is irreplaceable and could impact not just current users, but also their relatives and future generations. Shelly Simana, a Boston College law professor specializing in bioethics, noted that the case could help clarify not only the need for consent but also broader questions of genetic data ownership. “If the court agrees with the state, then it could set a precedent that the company cannot treat your DNA as just another asset,” Ms. Simana said.
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