Implications of 23andMe's Bankruptcy on Customer Data and DNA Testing Industry

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In 2008, genetic DNA testing was all the rage. Time Magazine hailed the invention as “absolutely revolutionary”, with American genomics company 23andMe leading the charge.

23andMe had launched two years earlier with a simple premise: if you could know more about your DNA, you could understand your ancestry, your risk factors for health conditions, and you could even ensure your medical treatment was personalised.

Since then, millions of customers have used the company’s mail-back saliva test for analysis.

But almost 20 years later — and two years after hackers gained access to millions of its profiles — 23andme has gone bust. The company filed for bankruptcy in March.

So, has the so-called genetic revolution delivered all it promised?

Dr Phillipp Bayer, an expert in bioinformatics, told SBS News: “It turns out biology is always more complicated than what we hoped.”

“Back then, we didn’t know how much one of these pieces of DNA can tell you about someone’s disease or propensity to disease or probability to develop some other malady in your life. We just didn’t know.”

Bayer said there are always far more factors working on figuring these outcomes, not just a single data point.

There’s a lot we don’t understand about using biological data to predict the future, and there have been unexpected impacts of its use.

Data could ‘compromise’ you

Dr Jan Charbonneau, an adjunct researcher at the Centre for Law and Genetics at the University of Tasmania, spoke to SBS about the potential risks of genetic data.

She said that for some customers in the United States, the results of genetic data testing can have unexpected impacts on eligibility for health insurance.

What does the genetic data revolution look like, now 23andMe is going bankrupt? image

“When you sign up for health insurance through your company, you attest that you do not know of any genetic predispositions,” she said.

“If you’ve had a 23andMe test, that’s not part of your health record.

“But by saying no, thinking you’re keeping your genetic results out of the official records, of course that could compromise your health insurance later.”

In 2008, the US government passed the Genetic Information Non-discrimination Act, which protects against genetic discrimination in employment, a law that was expanded to include health insurance plans a year later.

Calls for similar laws in Australia

In Australia, a doctors’ group has been campaigning for similar legislation.

The government announced in September 2024 that it would ban genetic discrimination in life insurance, but no legislation has passed yet.

Associate professor Julian Rait, the vice-president of the Australian Medical Association (AMA), says the future of the ban is uncertain with the upcoming federal election.

“We would hope that, in the new term of whatever government might follow, we would be able to advocate for that legislation being passed and obviously then promulgated so that people are better protected,” Rait told SBS News.

Rait says the AMA still believes genetics and genomics will transform the healthcare sector and should be incorporated into everyday healthcare.

But he says people should consult their doctor when considering undertaking a test.

Privacy risks

Rait also said that genetic testing brings cybersecurity risks and privacy concerns.

“It’s not just your own DNA. In some ways, it’s also shared by many family members,” Rait said.

“There’s the potential for information to be exposed that might not be necessarily to the comfort of all the other members of the family.”

Former customers of 23andMe are also asking questions about what to do with their data, now 23andMe has filed for bankruptcy.

Rait said there are concerns around data protection, with some customer data appearing on the dark web after 23andMe experienced a data breach in 2023.

But it’s the legitimate sale of the company’s assets as the bankruptcy proceeds that is also raising questions.

The company has said in a statement that the sale would not impact how customer data is managed, but the attorney-general of California, where the company’s headquarters is located, has warned customers to consider deleting their data.

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