23andMe files for bankruptcy to sell itself

Original Article ↗ Hacker News Discussion ↗

Bankruptcy Mechanics and Governance

  • Commenters clarify that this is a Chapter 11 filing (restructuring under court supervision), not Chapter 7 (liquidation and piecemeal asset sale). In Chapter 11, selling the business as a whole is likely if viable.
  • Several posts outline a governance deadlock: the CEO held ~49% voting control and repeatedly tried to take the company private at steadily lower prices; the board repeatedly rejected these offers while the company was reportedly burning ~$50M per quarter.
  • Some think the board erred by refusing a higher earlier offer; others argue the offers were discounted to market and the assets may still be worth more in an orderly bankruptcy sale.
  • SPAC listing, heavy VC funding, and scaling costs (large staff, loss-leader pricing on tests) are cited as structural reasons for failure in what is essentially a one-time-purchase business.

Data, Deletion, and Legal Constraints

  • The dominant concern: customer DNA and associated data are now a key asset in bankruptcy and may be sold to the highest bidder (insurers, pharma, governments, foreign buyers).
  • Many users report rushing to download and then delete their data, but there is deep skepticism that deletion is real rather than “soft delete” (a flag), especially in backups.
  • Some point to California (CCPA/CPRA) and EU (GDPR) rules requiring true deletion or crypto‑shredding; others note 23andMe’s own statements about “regulatory obligations” to retain some data and that research datasets can’t practically be unwound.
  • Shadow/inferred profiles are highlighted: relatives’ uploads can allow reconstruction of large parts of a non‑customer’s genome, limiting what deletion can achieve.

Ethical and Societal Risks of Consumer DNA

  • Critics always saw these services as trading extremely sensitive, durable data for trivial benefits (“3% Irish”) and worry about:
    • Insurance and employment discrimination, even if currently restricted by law.
    • Law-enforcement trawling via relatives (Golden State Killer–style cases).
    • Future eugenics, racial profiling, or targeting of specific groups.
  • Others emphasize substantial benefits: locating biological parents and siblings, uncovering medical risk markers, and enabling research. For some, knowing true parentage or disease risk is life-changing and worth the privacy trade-off.

Deletion Practices and Industry Culture

  • Long debate on soft vs hard deletion: soft delete protects against mistakes and bugs, but fails users in breaches and contradicts “burn my account” expectations.
  • Engineers describe practical and legal reasons to keep tombstones and logs, plus the difficulty of purging distributed backups; others argue that “our data model is too messy” isn’t a valid ethical excuse.
  • Crypto-shredding (per-user keys) is presented as a scalable solution, but some doubt it’s widely implemented.

What Happens Next and User Responses

  • Multiple comments call for a wealthy buyer (or the state) to acquire the company, destroy all data and samples, and “salt the earth,” but others see that as unrealistic given the data’s commercial value.
  • Practical advice circulates: immediately trigger in-product deletion tools, send formal GDPR/CCPA right-to-erasure requests, and keep a paper trail in case regulators or courts later scrutinize data handling during the bankruptcy and sale.