23andMe Settles Data Breach Lawsuit for $30 Million.
23andMe has agreed to pay $30 million and offer three years of security monitoring as part of a settlement for a lawsuit that alleged the genetics testing firm did not adequately safeguard the privacy of 6.9 million customers whose personal information was exposed in a data breach last year.
The agreement addresses allegations that 23andMe failed to inform customers of Chinese and Ashkenazi Jewish descent that they were specifically targeted by a hacker, who listed their information for sale on the dark web.
A preliminary settlement regarding the proposed class action was submitted to federal court in San Francisco late Thursday evening, pending the approval of a judge.
The settlement includes cash payments for customers whose data was compromised and allows them to participate in a program called Privacy & Medical Shield + Genetic Monitoring for a duration of three years. In a court filing submitted on Friday, 23andMe described the settlement as fair, adequate, and reasonable. Approximately $25 million of the expenses will be financed through cyber insurance coverage.
The security breach started in April 2023 and continued for about five months, impacting nearly half of the 14.1 million customers in 23andMe’s database at that time. 23andMe revealed this information in a blog post in October 2023.
A hacker gained access to 5.5 million DNA Relatives profiles, allowing users to share information among themselves, and also obtained data from an additional 1.4 million customers who utilized a feature known as Family Tree. The attorneys representing the plaintiffs stated that the settlement met their clients’ primary concerns and took into account the considerable risks associated with continuing litigation, especially considering 23andMe’s challenging financial situation. 23andMe lost lost $69.4 million on revenue of $40.4 million in the quarter ending June 30.
Anne Wojcicki, the co-founder and CEO of 23andMe, has been working to take the company private again, three years after its initial public offering at $10 per share. Since mid-December, the stock has been trading for less than $1. The attorneys representing the plaintiffs may request legal fees that could reach as high as 25% of the total settlement amount.