DNA-testing firm 23andMe faces struggle for existence

Three years ago, the DNA-testing firm 23andMe enjoyed immense success, with its share price surpassing that of Apple. However, after a period where millions eagerly submitted saliva samples for comprehensive reports on their ancestry, family connections, and genetic makeup, the company now finds itself battling for survival. Its share price has significantly dropped, and this week it narrowly avoided being removed from the stock market. This situation raises serious concerns regarding the future of its vast and highly valuable database of individual human DNA, as the company holds exceptionally sensitive customer information. When contacted by the BBC, 23andMe expressed optimism about its future prospects and affirmed its “committed to protecting customer data and consistently focused on maintaining the privacy of our customers.” The question arises: how did a company once considered among the most prominent tech firms reach a point where its very existence is being questioned? Not long ago, 23andMe garnered positive public attention. Its notable clientele included Snoop Dogg, Oprah Winfrey, Eva Longoria, and Warren Buffett, while millions of users received unexpected and transformative results. Some individuals discovered discrepancies in their parentage or learned of a genetic predisposition to severe health conditions. During this period, its share price soared to $321. Three years later, that price has plummeted to just under $5, leaving the company valued at only 2% of its former worth. What factors contributed to this decline? According to Professor Dimitris Andriosopoulos, founder of the Responsible Business Unit at Strathclyde University, 23andMe’s difficulties stem from two main issues. Firstly, the company lacked a sustainable ongoing business model, as customers had little reason to return after purchasing their initial DNA report. Secondly, plans to utilize an anonymized version of its collected DNA database for pharmaceutical research took too long to generate profits, primarily due to the extensive duration of the drug development process. This analysis leads Professor Andriosopoulos to a direct conclusion: “If I had a crystal ball, I’d say they will maybe last for a bit longer,” he informed the BBC. “But as it currently is, in my view, 23andMe is highly unlikely to survive.” The challenges facing 23andMe are mirrored by instability within its leadership. The board resigned during the summer, with only CEO and co-founder Anne Wojcicki – sister of the late YouTube boss Susan Wojcicki and ex-wife of Google co-founder Sergei Brin – remaining from the original executive team. Speculation has circulated that the firm may soon either cease operations or be acquired, claims that the company denies. In a statement, the company affirmed: “23andMe’s co-founder and CEO Anne Wojcicki has publicly shared she intends to take the company private, and is not open to considering third party takeover proposals.” However, this has not halted the speculation, with competitor Ancestry urging US competition regulators to intervene should 23andMe ultimately be put up for sale. While the rise and fall of companies is not uncommon, particularly in the technology sector, 23andMe presents a unique case. “It’s worrying because of the sensitivity of the data,” states Carissa Veliz, author of Privacy is Power. This concern extends beyond the individuals who directly used the firm’s services. “If you gave your data to 23andMe, you also gave the genetic data of your parents, your siblings, your children, and even distant kin who did not consent to that,” she explained to the BBC. David Stillwell, professor of computational social science at Cambridge Judge Business School, concurs that the implications are significant. “DNA data is different. If your bank account details are hacked, it will be disruptive but you can get a new bank account,” he elaborated. “If your (non-identical) sibling has used it, they share 50% of your DNA, so their data can still be used to make health predictions about you.” The company maintains that these types of concerns are unfounded. In its statement, it asserted: “Any company that handles consumer information, including the type of data we collect, there are applicable data protections set out in law required to be followed as part of any future ownership change.” It added: “The 23andMe terms of service and privacy statement would remain in place unless and until customers are presented with, and agree to, new terms and statements.” Furthermore, legal protections exist in the UK under its version of the data protection law, GDPR, which would apply whether the firm goes bankrupt or changes ownership. Nevertheless, all companies are susceptible to hacking, as 23andMe experienced 12 months ago. Carissa Veliz continues to express unease, arguing that a more robust approach is ultimately necessary to safeguard our most personal information. “The terms and conditions of these companies are typically incredibly inclusive; when you give out your personal data to them, you allow them to do pretty much anything they want with it,” she commented. “Until we ban the trade in personal data, we are not well protected enough.”