Genetic testing company 23andMe’s recent sale to a research institute “does not comply” with California’s landmark genetic privacy law, state Attorney General Rob Bonta’s office said Monday.
What happened: Bonta’s office said the terms of 23andMe’s sale, approved Friday by a federal bankruptcy judge, run afoul of the state’s Genetic Information Privacy Act, which requires companies to obtain opt-in consent from customers before selling their genetic information to third parties.
TTAM Research Institute, a nonprofit medical research company led by 23andMe founder and former CEO Anne Wojcicki, is set to purchase genetic data and other assets for $305 million under the approved sale agreement.
“We believe that 23andMe’s proposed bankruptcy sale of vast amounts of genetic data and biological samples to TTAM — or potentially other purchasers — does not comply with GIPA and are disappointed in the court green lighting the sale despite our objection,” Bonta spokesperson Elissa Perez said Monday in an email to POLITICO.
Why it matters: Perez said Bonta’s team is “evaluating next steps,” suggesting the state could take further action to intervene in 23andMe’s future since the south San Francisco-based company filed for bankruptcy in March. Bonta’s office previously tried to block the sale in court and warned state residents to “urgently” delete their genetic data from the platform.
“California has been a party to the 23andMe bankruptcy proceedings since day one, and we will continue to oppose any actions by the company and any purchaser of personal, sensitive data that are inconsistent with the requirements of California law,” Perez said.
23andMe spokesperson Ann Sommerlath told POLITICO in an email that the company’s sale to TTAM enforces “binding commitments to adopt additional consumer protections and privacy safeguards,” including email notices when a sale closes.
Wojcicki said Monday morning that “individuals should be empowered to have choice and transparency with respect to their genetic data.”
Background: California was one of more than 30 states that objected to 23andMe’s sale over genetic privacy concerns. Most states resolved their objections before the sale and dropped their opposition; only California, Kentucky, Tennessee, Texas and Utah continue to object to the sale.
U.S. Bankruptcy Judge Brian C. Walsh dismissed the five states’ complaints in a court order Friday. Walsh ruled that GIPA’s opt-in requirements for third-party sales of genetic information do not apply to TTAM’s purchase, arguing people’s genetic information will remain private.
“Customers will deal with the same business, the same employees, familiar leaders, and the same privacy policies,” Walsh wrote in a 38-page memo addressing state objections. “I see no need to impose obstacles.”
Federal lawmakers across both parties argued it should be 23andMe’s responsibility to get affirmative consent from customers before selling genetic data to a new owner when interim CEO Joe Selsavage testified before Congress earlier this month.
What’s next: 23andMe’s bankruptcy sale to TTAM is expected to close in the coming weeks following Friday’s approval, according to the company.