23ANDME BANKRUPTCY SPARKS CONCERNS OVER GENETIC DATA PRIVACY

A coalition of 27 states and the District of Columbia filed a lawsuit in bankruptcy court on June 9, 2025, aiming to prevent the sale of 23andMe's genetic data archive without explicit customer consent.

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The legal action follows the company’s Chapter 11 bankruptcy filing in March, raising alarms about the potential misuse of sensitive personal information.

The lawsuit, led by attorneys general including Oregon's Dan Rayfield, argues that 23andMe's biological samples, DNA data, health-related traits, and medical records are too sensitive to be sold without each customer's informed consent. Filed in the Eastern District of Missouri's bankruptcy court, the action responds to biotechnology firm Regeneron Pharmaceuticals’ $256 million bid to acquire 23andMe. The states contend that genetic data, unlike other personal information, cannot be replaced if compromised, making its protection critical. The lawsuit seeks to ensure that any sale respects customer privacy rights, preventing the data from being treated as ordinary property.

23ANDME’S BANKRUPTCY AND DATA RISKS

Founded in 2006, 23andMe offered saliva-based DNA testing kits for ancestry and health insights, amassing data from over 15 million users. The company struggled financially after going public in 2021, leading to a 40% staff reduction and bankruptcy filing in March 2025. The filing raised concerns about data security, particularly after a 2023 breach exposed the genetic information of nearly 7 million customers, resulting in a $30 million class-action settlement. Experts warn that bankruptcy turmoil, including job cuts, could weaken safeguards against hackers, while the lack of a comprehensive U.S. federal privacy law—only about 20 states have such laws—limits protections.

REGENERON’S ACQUISITION BID

Regeneron Pharmaceuticals announced its intent to buy 23andMe for $256 million in May 2025, pledging to comply with the company’s existing privacy policies and applicable laws.