California Attorney General Rob Bonta announced on Monday that the state will receive a $6 million settlement from 23andMe. This settlement is part of the company's bankruptcy proceedings. It resolves California's legal claims related to a 2023 data breach that exposed the personal information of 6.9 million customers, including genetic data.
Key Details
California had tried to block the $305 million sale of 23andMe's assets to the TTAM Research Institute. This nonprofit is controlled by co-founder Anne Wojcicki. The state argued that the sale violated the Genetic Information Privacy Act. They claimed customers did not give clear consent for their data to be sold. A U.S. bankruptcy judge ruled against California's objections. The judge stated that the state could not pursue claims against the company's successor. After losing an appeal in federal court, California agreed to the settlement, according to court documents filed on Monday.
Background
Bonta emphasized the importance of consumer privacy. He said, "I am proud to fight for the privacy rights of Californians and to deliver this settlement for consumers who put their trust in 23andMe." He reminded customers that they can delete their genetic data regardless of ownership changes. The breach specifically affected over 855,000 Californians, as noted by the attorney general's office. As part of its bankruptcy, 23andMe also agreed to pay $46.75 million to victims of the data breach.
The settlement could influence investor sentiment in the biotechnology sector. This is especially true for companies handling sensitive consumer data. Concerns over data privacy and regulatory compliance may increase scrutiny on similar firms.
Investors will watch for further developments in 23andMe's restructuring plan. They will also look for updates on the implementation of data protection measures following this breach.
Based on reporting by: livemint.com, theguardian.com