DNA-testing site 23andMe fights for survival

Three years ago, 23andMe, the DNA-testing company, enjoyed immense success, with a share price that surpassed even Apple’s. Millions eagerly sent in saliva samples, anticipating detailed insights into their ancestry, health, and family connections. However, the company now finds itself in a precarious position, struggling to avoid delisting from the stock market as its share price plummets.

This dramatic decline raises critical concerns, especially given that 23andMe possesses highly sensitive genetic data from its customers. What would happen to this vast and valuable database if the company falters? When asked about its future, 23andMe maintained a positive outlook, emphasizing its commitment to customer data protection and privacy.

So, how did this once-prominent firm find itself on the brink of crisis?

The Boom and Bust of DNA Testing

Not long ago, 23andMe was a household name, associated with celebrities like Snoop Dogg, Oprah Winfrey, and Warren Buffett. Users often reported transformative revelations, from uncovering unexpected family connections to discovering genetic predispositions to health issues. At its peak, the company’s share price soared to $321.

Fast forward to today, and that value has plummeted to under $5, reducing the company’s market worth to a mere 2% of its former self. What went wrong?

According to Professor Dimitris Andriosopoulos from Strathclyde University, 23andMe’s downfall stemmed from two main issues. First, the company lacked a sustainable business model. Once customers received their DNA reports, there was little incentive for them to engage further. Second, plans to utilize an anonymized version of its DNA database for drug research have been slow to yield profits, largely due to the lengthy drug development process. Andriosopoulos predicts that, without significant changes, 23andMe may not survive much longer.

Leadership Turmoil and Speculation

The turmoil within 23andMe extends to its leadership. After the board resigned last summer, only co-founder and CEO Anne Wojcicki remains. Wojcicki, who is also the sister of former YouTube head Susan Wojcicki and ex-wife of Google co-founder Sergei Brin, has faced speculation about the company’s future. While 23andMe insists it is not considering a sale, rumors persist, with rival company Ancestry even urging U.S. regulators to intervene if 23andMe moves toward privatization.

Concerns Over Genetic Data Privacy

The situation surrounding 23andMe is particularly alarming due to the sensitive nature of genetic data. Carissa Veliz, author of Privacy is Power, highlights that anyone who used the service also inadvertently shared data from their relatives, raising ethical questions about consent. David Stillwell, a professor at Cambridge Judge Business School, echoes these concerns, noting that while financial data breaches can be mitigated by changing accounts, genetic information is irrevocable.

Despite 23andMe’s assurances that data protection laws will apply in any future ownership change, critics like Veliz are not reassured. The terms and conditions associated with these services often grant companies extensive rights over personal data, leading to potential misuse. Veliz argues that without a ban on the trade of personal data, consumers remain vulnerable.

The Path Ahead

As 23andMe navigates this challenging landscape, the stakes could not be higher. The company insists that any future ownership change will adhere to applicable data protection laws, and that customers will have a say in any new terms of service. However, past incidents, including a data breach a year ago, have left many users wary.

In conclusion, while the company attempts to regain its footing, the future remains uncertain. For consumers, the implications of this turmoil extend far beyond corporate struggles, as the protection of their most personal information hangs in the balance. As the story of 23andMe unfolds, it serves as a cautionary tale about the intersection of technology, privacy, and corporate responsibility.