27 States Sue to Block 23andMe Genetic Data Sale

Dozens of states, including the District of Columbia, have filed a lawsuit to block the sale of 23andMe’s genetic data. The lawsuit comes as a biotechnology company seeks to acquire 23andMe out of bankruptcy for hundreds of millions of dollars. The states argue that the sale of genetic material collected from 15 million people is too personal to be sold without the explicit consent of 23andMe’s customers.

The lawsuit, filed by a bipartisan group of 27 states, alleges that 23andMe has collected and is now looking to sell “genotype data,” or raw genetic code, from 15 million people. This data is paired with information on a person’s physical appearance and their family tree. The potential buyer, Regeneron, is facing a bidding war with 23andMe founder Anne Wojcicki, who offered $305 million for the company through her recently founded nonprofit TTAM Research Institute.

The states claim that genetic data is highly personal and its sale could have ramifications for people related to a 23andMe customer or their descendants. The lawsuit argues that genetic data, unlike other forms of data routinely sold between companies, could remain in existence in a company database forever and could be used in everything from research to cloning long after future generations of the original 23andMe customer have died.

Regeneron has stated that it will follow 23andMe’s privacy policies and applicable law, but the lawsuit argues that the sale of genetic data conflicts with privacy protection laws in individual states. For example, Florida bars the sale of genetic data without express customer consent under the threat of prison time and up to a $10,000 fine.

A spokesperson for 23andMe claimed that the argument by the attorneys general was without merit, stating that the sale is permitted under 23andMe privacy policies and applicable law. The spokesperson also noted that customers will continue to have the same rights and protections in the hands of the winning bidder, and that both remaining bidders are U.S. companies that have committed to abide by 23andMe privacy policies.

Daniel Gielchinsky, a Florida-based bankruptcy attorney, noted that the decision on whether 23andMe can sell its genetic material will be made in bankruptcy court, which has full jurisdiction over the issue. The lawsuit may have been made outside of bankruptcy court because the states believe they won’t get a fair shake for similar objections already raised in bankruptcy court.

Gielchinsky also noted that if the states succeed in preventing the sale of 23andMe’s genetic data, it would render the company essentially worthless. If the bankruptcy court does approve the sale, it will likely come with consumer privacy protections that the buyer, Regeneron, must adhere to.

If the sale of the genetic data is allowed to go forward, it could set a precedent for future cases, as companies collect increasingly more personal data about Americans. Gielchinsky noted that while genetic data may not be as saleable as browsing data, it could create a marketplace where that data can ultimately be sold to someone who the consumer didn’t sign up with in the first place.