What Happens to Your Health Data If a Wearable Company Goes Bankrupt?
Your health data usually becomes a business asset that can be sold or transferred as part of a bankruptcy or acquisition, unless the company's privacy policy specifically promised otherwise and a court enforces that promise. It is not automatically deleted, and no law requires a health app to erase your data just because the company failed.
Can a company sell my health data if it goes bankrupt?
Generally, yes, because customer data is treated as a company asset like inventory or equipment, and a bankruptcy trustee's job is to sell assets to pay creditors. This became a live public concern in 2025 when 23andMe filed for bankruptcy and put its genetic and health data up for sale as part of the estate, prompting state attorneys general to urge customers to delete their data before a sale closed (TeachPrivacy summary of the 23andMe bankruptcy). The same dynamic applies to any health or wearable app: if the company shuts down or is acquired, your data is part of what gets valued and transferred.
Is there any legal protection at all?
Some, but it is narrower than most people assume. The main precedent is the FTC's 2000 intervention in the Toysmart bankruptcy, where the agency argued that selling customer data as a stand-alone asset would be deceptive because Toysmart's privacy policy had promised the data would never be shared with third parties (FBM law firm, "Privacy During Bankruptcy Proceedings"). The case settled with restrictions on the sale, and Congress later created a bankruptcy "consumer privacy ombudsman" role to review these sales, but legal scholars who have studied it call the role largely ineffective at actually stopping transfers (Harvard Law Review on the Consumer Privacy Ombudsman). In practice, the protection you get depends almost entirely on the specific wording of the privacy policy you agreed to and whether a court is willing to enforce it against creditors who want to be paid.
Does this apply to acquisitions too, not just bankruptcy?
Yes. An acquisition is a much more common outcome than bankruptcy for a health or wearable app, and the same basic question applies: does your data transfer to the new owner under the old privacy terms, new terms, or somewhere in between. Most privacy policies include a data-transfer clause that permits sharing your data with a successor company as part of a merger or sale, which means the moment you accept the terms of service, you have typically already agreed to this outcome. The practical implication is the same either way: reading the privacy policy's "change of ownership" or "business transfers" section before you connect sensitive health data tells you more about your actual protection than the marketing page does.
What does this mean for MotionSync specifically?
MotionSync's privacy policy states what happens to your data today: MotionSync never sells your data and never uses your health data for advertising, and you can delete your account and your data at any time. Those commitments describe current practice; they are not a substitute for reading the actual terms of any company, including MotionSync, before you connect a wearable. If MotionSync were ever acquired, any transfer of your data would be governed by whatever the privacy policy says about ownership changes at that time, which is why the specific wording of a privacy policy matters more than a general promise of "privacy-first" branding.
What should I actually check before connecting a wearable to any app?
Three things matter more than the marketing copy. First, does the privacy policy have a "business transfers" or "change of control" clause, and what does it say happens to your data in a sale. Second, is there a stated data retention and deletion policy, and does deleting your account actually delete the underlying data or just deactivate the display of it. Third, has the company published anything about what happens to data if it shuts down, since almost none do and the absence of an answer is itself useful information.
Comparing what different situations actually mean for your data
| Scenario | What typically happens to your data | Your leverage |
|---|---|---|
| Company stays in business | Governed by the current privacy policy, which can change with notice | You can read updates and delete your account if terms change |
| Company is acquired | Usually transfers to the new owner under a "business transfer" clause already in the terms you accepted | Limited once you've agreed to the terms; check the clause before signing up |
| Company goes bankrupt | Data is a sellable asset; a bankruptcy court decides, sometimes with FTC or state AG involvement if promises were broken | Delete your data before a sale closes if you have advance notice, as in the 23andMe case |
| Company simply shuts down with no sale | Rare outcome is outright deletion; more common is quiet retention or a sale of remaining assets including data | Ask for confirmation of deletion in writing if the company is still reachable |
Frequently asked questions
Does deleting my account guarantee my data is destroyed?
Not necessarily. "Delete my account" and "delete my underlying data" are not always the same action, and retention practices vary by company. Check whether the privacy policy defines what account deletion actually removes, and ask directly if it is not stated.
Did the 23andMe bankruptcy actually result in my data being sold?
23andMe's data was included as an asset in its 2025 bankruptcy proceeding, and the sale process drew objections from state attorneys general urging customers to delete their data first (Alston Privacy, "Can 23andMe Really Sell Genetic Data Via Bankruptcy"). The specific outcome for any individual account depends on when they deleted data relative to the sale.
Should I avoid connecting my wearables to any third-party app because of this risk?
Not necessarily, but you should read the business-transfer and deletion sections of the privacy policy first. The risk is not unique to any one company or category of app. It is a structural feature of how consumer data is treated as a business asset, and it is present the moment any company holds your data at all.
Related reading: for what actually happens when you switch devices, see What Happens to Your Health Data When You Switch Wearables?. For the broader question of whether connecting multiple wearables to one app is safe in the first place, see Is It Safe to Connect Your Wearables to One Health App?.
About the author
Written by MotionSync Team
Editorial Team
The MotionSync editorial team writes about wearable data, recovery, sleep, and heart health in plain English. Articles draw on peer-reviewed research and the metrics your wearable already tracks. Content is for general education and is not a substitute for medical advice.
