California Attorney General Rob Bonta announced a $6 million settlement in 23andMe's bankruptcy case, resolving the state's legal claims related to a 2023 data breach that exposed genetic and personal information of 6.9 million customers. The settlement was confirmed on October 19, ending California's objections to the sale of 23andMe assets to TTAM Research Institute, a nonprofit controlled by co-founder Anne Wojcicki, according to livemint.com.
23andMe filed for bankruptcy in March 2025 after a decline in demand and legal challenges stemming from the data breach. California had attempted to block the $305 million sale of 23andMe's assets, arguing that the bankruptcy sale violated the Genetic Information Privacy Act and that customers had not given express consent for their data to be sold. However, a US bankruptcy judge and a federal district court ruled against California's objections, leading the state to drop further appeals as part of the settlement, court documents show.
The case highlights ongoing legal complexities around genetic data privacy and bankruptcy proceedings. California had pushed for stronger protections, including preventing the transfer of customer data without explicit consent. Customers were allowed to delete their data during the bankruptcy sale process. The settlement follows a broader trend of regulatory scrutiny over personal data handling by genetic testing companies, which have faced declining demand and legal fallout after high-profile breaches.
California's $6 million settlement marks the conclusion of its legal challenge to 23andMe's asset sale. The state will receive the payment as part of the bankruptcy proceedings, and customers retain control over their data deletion options. Attorney General Rob Bonta emphasized the importance of privacy rights in the settlement announcement, underscoring the state's commitment to protecting genetic information under the Genetic Information Privacy Act.