Netflix 'Spying' on Customers and Kids, Tracking Data Without Consent — Texas AG Files Lawsuit

Streaming giant Netflix is facing a lawsuit for allegedly spying on viewers and selling their data to advertisers. Texas Attorney General Ken Paxton has accused the platform of making false claims about data privacy and secretly collecting information about users, including kids.

According to Paxton, Netflix presented itself as different from other Big Tech companies by repeatedly claiming it does not gather or sell user data to advertisers. He cited former CEO Reed Hastings’ 2019 shareholder letter, in which he said Netflix would not sell user data. Hastings made a similar claim in 2020.

However, Paxton said Netflix closely monitored its users’ behavior. “Netflix built this surveillance machinery to scrutinize how users and their children behave—what they click, how long they linger, what they avoid, when they pause, what draws them in, what they replay or skip, where they are, what devices they use, what other devices are in their home, what other apps they interact with, and much more,” the filing reads.

The lawsuit further states that Netflix sold this data to advertisers and data brokers, particularly after launching a cheaper ad-based subscription plan in 2022. Paxton said the streaming platform has violated the Deceptive Trade Practices Act (DTPA), a law enacted in 1973 to protect consumers from false and misleading business practices.

In the filing, Paxton said that apart from selling data, Netflix also used deceptive designs to keep users engaged to the platform. According to the lawsuit, the company keeps people fixated on the screens with features like autoplay.

“Autoplay undermines parents’ control of their children’s screen time. For a busy parent trying to manage a household under pressure, autoplay is a constant vise grip designed to keep her child fixed under Netflix’s microscope. Netflix never told Texans this,” the complaint states.

“To the public, Netflix presents itself as a mere content-streaming service. To Silicon Valley engineers, it is more candid: ‘We’re really a logging company... a logging company that occasionally streams movies.’ And this is true,” it further reads.

Paxton said Netflix generated $39 billion in revenue in 2024, of which $1.5 billion came from Texans. He asked the court to order Netflix to delete all data collected from Texans, stop selling data for targeted advertising without users’ consent, and disable autoplay by default on children's profiles.

Additionally, Paxton requested that Netflix pay $10,000 for each violation of the DTPA. A Netflix spokesperson said the company denies the allegations and complies with data protection laws.

“Respectfully to the great state of Texas and Attorney General Paxton, this lawsuit lacks merit and is based on inaccurate and distorted information. Netflix takes our members' privacy seriously and complies with privacy and data protection laws everywhere we operate,” a company spokesperson said in a statement to Reuters.