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Texas: Texas Attorney General Ken Paxton has filed a lawsuit against Netflix, accusing the streaming giant of covertly monitoring customers and misleading them about its data collection. The legal action, lodged on Monday in a Collin County court near Dallas, claimed that the company gathered and shared user information without consent while using design features that keep viewers glued to the screen. 

In his lawsuit, Ken Paxton alleged that Netflix presented itself as a privacy-conscious, ad-free platform, yet quietly tracked viewing habits and sold those insights to commercial data brokers and advertising firms. The complainant stressed that the practice amounted to “spying” on families and children, generating substantial revenue from data that users believed was not being collected.

Furthermore, the case also takes aim at the “dark patterns” within the service, including autoplay functions that automatically queue the next episode. Paxton contended that such features were deliberately deployed to maximise watch time, allowing Netflix to harvest more data and deepen user engagement for commercial gain.

Allegations Of Data Harvesting

According to reports, at the centre of the lawsuit is the allegation that Netflix misled subscribers about its data policies for years. The complaint cited a 2020 statement from then-CEO Reed Hastings, who said, “We don’t collect anything,” in an apparent effort to distance the company from rivals like Amazon, Facebook and Google.

However, the Texas Attorney General emphasised that the claim was false, asserting that Netflix had been tracking and monetising viewing behaviour long before it introduced advertising in 2022. The state claimed that the company used that data to build profiles, target advertisements and profit from information gathered under earlier promises of minimal data collection.

Accusations Around Children’s Profiles

The lawsuit also focused on Netflix’s handling of children’s accounts. Texas alleged that the platform still applies the same behavioural tracking tools used for adults, while it does not serve targeted ads to younger users. According to the complaint, the allegations meant children’s interactions are analysed and fed into the same surveillance system.

Paxton’s office further claimed that features such as autoplay were designed to strengthen binge-watching and keep audiences engaged for longer periods. The lawsuit references historical marketing material that promoted binge-watching, asserting that the tactic was part of a deliberate strategy to increase data capture and advertising value.

What Is Legal Basis

Reports suggested that the Texas Attorney General is pursuing the case under the Texas Deceptive Trade Practices Act, which prohibits businesses from engaging in false or misleading conduct. Paxton sought an order requiring Netflix to delete data collected unlawfully, to stop using such information for targeted advertising without consent, and to pay civil penalties of up to $10,000 per violation.

In a statement, Paxton said, “Netflix is not the ad-free and kid-friendly platform it claims to be. Instead, it has misled consumers while exploiting their private data to make billions.” An official response is awaited by Netflix over the allegations.

Background Of The Allegations

Notably, Netflix launched its streaming service in 2007 and grew into a global entertainment company valued at more than $350 billion. The streaming giant, for the past many years, operated without advertising, a point Reed Hastings frequently outlined as a differentiator. He stepped down as CEO in 2023 and served as chair until April 2026.

The lawsuit arrived as Paxton campaigns for a US Senate seat, challenging incumbent Republican Senator John Cornyn. The analysts suggested that the outcome could have implications for how streaming platforms disclose data practices and manage user engagement features in the US.