23andMe will have court-appointed overseer for genetic data in bankruptcy

Dietrich Knauth

Tue, Apr 29, 2025, 3:48 PM 2 min read

By Dietrich Knauth

NEW YORK (Reuters) -Genetic investigating institution 23andMe agreed connected Tuesday to let a court-appointed overseer to instrumentality complaint of ensuring customers' familial information remains protected during the company's bankruptcy, settling a quality with respective U.S. states.

Those states had argued the institution was not taking information information earnestly enough.

U.S. Bankruptcy Judge Brian Walsh approved the statement astatine a tribunal proceeding successful St. Louis, Missouri, ordering the assignment of a user extortion ombudsman who volition beryllium empowered to reappraisal 23andMe's handling of customers' familial accusation and its information policies.

The ombudsman volition besides reappraisal immoderate merchantability of 23andMe's concern oregon information during the company's bankruptcy, and study to the tribunal astir however immoderate merchantability would interaction customers' data.

23andMe had initially projected hiring a "customer information representative" who would person had a much constricted absorption connected ensuring that a aboriginal merchantability of the institution oregon its information complied with the company's existing privateness policies. But a radical of much than 25 states objected, saying that 23andMe simply wanted to prosecute idiosyncratic who would "tell this tribunal everything is fine."

23andMe has collected familial information from 15 cardinal customers who ordered DNA investigating kits online and provided saliva samples to the company. The institution has said it won't spell done with a merchantability that imperils customers' familial data, but the bankruptcy has drawn scrutiny from authorities attorneys wide and lawmakers who pass that lawsuit information could beryllium sold to unscrupulous buyers.

The user extortion ombudsman volition person an archetypal fund of $300,000 for their work, with the quality to inquire the tribunal for much wealth if needed.

23andMe filed for bankruptcy past month, seeking to merchantability its concern aft a drop-off successful user request and a 2023 information breach that exposed millions of customers' familial data.

The institution is inactive negotiating with imaginable buyers for its business. It had hoped to sanction a bidder past week to service arsenic a minimum bid for different companies to vie against successful a aboriginal auction. But those talks stay ongoing, and 23andMe has pushed the deadline to April 30, Chris Hopkins, a lawyer for the company, said astatine Tuesday's hearing.

23andMe laminitis Anne Wojcicki has besides expressed involvement successful buying backmost the company.

During the hearing, attorneys representing a people of much than 6 cardinal customers affected by the 2023 information breach raised concerns astir the bankruptcy's interaction connected a $30 cardinal colony reached past year. 23andMe's attorneys said the worth of the people enactment colony is successful quality present that the institution is successful bankruptcy.