The genetic testing service giant filed for Chapter 11 bankruptcy this past March, following decreasing demand for genetic testing kits. The filing comes at a time when the company is still reeling from a data breach in 2023 that threatened its reputation.
What Went Wrong
The company was founded by Anne Wojcicki in 2006. Wojcicki had a clear vision: to not only provide customers with their genetic lineage but also to provide them with personalized information on their possible health risks. Wojcicki’s ultimate goal was to create medications based on genetic research, thus revolutionizing the way healthcare was delivered to Americans.
The company quickly became a hit, with 23andMe hosting ‘spit parties‘ with celebrities, arranging for celebrity endorsements and turning Wojcicki into a billionaire. Still, one glaring problem loomed in the background: the question of privacy.
A Reputation Ruined
The 2023 data breach that ruined the company’s reputation leaked data for around 7 million people. It was as if the big looming question that haunted the company in the past had finally become true. A data breach of that magnitude gave hackers access to customers’ sensitive genetic and health data. 23andMe concluded that the breach had been made possible because some customers had reused their old passwords. In the end, the company agreed to a $30 million settlement.
But, by then, the damage had already been done. Previously valued at $6 billion, the company fell to $48 million. Anne Wojcicki stepped down from her role as chief executive and several other board members also resigned from their roles. From then on, customers’ concerns only continued to be amplified.
What Comes Next?
Some customers have taken to deleting their data. While the company has announced it will continue to abide by its privacy policy to protect customer’s data, the future remains uncertain. Were the company to be involved in bankruptcy (as they are now), their privacy policy states “personal Information may be accessed, sold or transferred as part of that transaction” and the privacy policy will still apply when transferred to the new entity. For now, however, the company’s future is still in question.
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