Private equity firm Blackstone has purchased Ancestry.com, along with its troves of data on millions for a whopping $4.6 billion, raising privacy concerns over how the firm will handle the data.
Ancestry.com is the largest DNA service provider in the world, and revolutionised the way in which people learnt about their family tree and origins of their ancestors. It, along with a host of other service providers, has also come under fire from privacy advocates for selling data of its customers to third parties.
Blackstone’s recent acquisition of Ancestry means that the company not only owns the Blackstone name, it also owns the troves of data on millions of users that Ancestry has collected over its 24-years of operating.
It has 3 million paying subscribers, 27 billion records on 100 million family trees, and says that it has tested more than 18 million people, according to a report from Vice.
Blackstone has told Vice that “to be crystal clear, Blackstone will not have access to user data and we are deeply committed to ensuring strong consumer privacy protections at the company… we will not be sharing user DNA and family tree records with our portfolio,” a spokesperson said.
An Ancestry spokesperson echoed the sentiment, stating that “Ancestry’s terms and conditions and privacy statement that is in effect for our users remains the same and Ancestry’s commitments to protect our customer’s personal data has not changed.”
This, however, runs contrary to the ambiguities in data regulation, which were pointed out by Jen King, the Director of Consumer Privacy at the Center for Internet and Society.
King says that “ultimately, there’s no specific protections for that data. So, you kind of just have to rely on the companies to say they’ll do what they’re going to do and honor their promises and not sell off your data to the highest bidder.”
According to a report from The Guardian’s Laura Spinney, “it has gradually become clear that the main source of revenue for at least some of these companies comes from selling the data on to third parties.” Making things considerably worse, Spinney explained that “only a third of the 86 companies offering genetic testing services online explained to customers how their data would be used.”
“The larger issue, though, is that with all of these databases there is ambiguity about who has access to them, and for what purposes,” Spinney writes.
Blackstone, according to the company’s Wikipedia page was involved in a scandal after handing over its guest lists to U.S. Immigration and Customs officials without a warrant. Blackstone, who owned hotel chain Motel 6 at the time, settled the case for $19.6 million.
Ancestry’s most recent valuation put a price of $2.6 billion on the company, which Jen King considers curious in terms of the $4.6 billion paid for Ancestry by Blackstone, especially with the number of people using the site dropping.
“Companies really seek profit at a high level. So it’s kind of in my mind curious that you’d be diving into an industry that suddenly is experiencing some slower growth,” she said.
According to a report from Moody’s, a rating agency cited by the Financial Times, Ancestry has a “very high debt burden” and its 2019 revenue dropped by 1.2%, with its DNA unit reporting sharp drops of 48%.
Blackstone’s senior managing director, David Kestnbaum has since said in a statement that “we believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves.”