FTC concerned about privacy protections in 23andMe bankruptcy

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By Jody Godoy

(Reuters) -The U.S. Federal Trade Commission is concerned about the potential sale or transfer of Americans’ personal information by 23andMe ancestry testing company which recently filed for bankruptcy, the agency’s chairman said on Monday.

Any purchaser of 23andMe assets should agree to be bound by the company’s existing privacy policy, FTC Chairman Andrew Ferguson said in a letter to the U.S. trustee, a government office that oversees bankruptcies.

The company filed for bankruptcy protection on March 23 amid weak demand for its ancestry testing kits. It has said the bankruptcy process will not affect how it stores, manages or protects customer data.

Officials including California Attorney General Rob Bonta had questioned what would happen to the genetic data collected by 23andMe. The company’s privacy policies say that the data could be sold to other firms. Bonta has urged 23andMe customers to delete their genetic data.

In 2023, hackers exposed the personal data of nearly 7 million 23andMe customers over a five-month period, dealing a major blow to the company’s reputation and compounding its growth problems. The breach raised alarm among customers concerned about their privacy and how DNA-testing firms handle their data.

(Reporting by Jody Godoy in New York, Editing by Franklin Paul and Matthew Lewis)