Texas Attorney General Ken Paxton (R) filed a lawsuit against Netflix on Monday, accusing the streaming giant of spying on state residents and engaging in deceptive trade practices. The suit claims Netflix secretly collected and sold user data to advertisers, contradicting its earlier promises to avoid advertising and data mining.
Paxton alleged that Netflix designed its platform to be addictive, generating billions annually by covertly monetizing consumer data. The streaming service, originally marketed as an ad-free haven, pivoted to digital advertising in 2022, according to the lawsuit, leveraging the data it quietly extracted from users—including children—to fuel targeted ads.
The lawsuit cites a 2019 letter from Netflix co-founder and chairman Reed Hastings to shareholders, where he assured them that rumors of Netflix moving into advertising were false. It also references Hastings’ remarks from a 2020 earnings call, where he again denied collecting user data for ad purposes.
“Netflix’s explosive financial growth reflects a deliberate choice to cash in on the trust it spent years cultivating under false pretenses,” the lawsuit states. “In 2022, Netflix pivoted into digital advertising, leveraging the mountains of data it quietly extracted from the children and families it kept fixated on their screens.”
Netflix did not immediately respond to a request for comment from The Hill, but a spokesperson told Variety, “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.” The company added, “We look forward to addressing the Texas Attorney General’s allegations in court and further explaining our industry-leading, kid-friendly parental controls and transparent privacy practices.”
Paxton’s suit alleges that Netflix allows third-party advertisers to match their data with Netflix’s user data, a practice users never consented to. The state is requesting a jury trial and seeking an order to prevent Netflix from using user data for targeted advertising toward Texans without explicit, informed consent. The filing also demands that Netflix cease collecting behavioral data from children without parental consent and pay all prosecution and investigative fees.
This legal action comes as Paxton faces his own political battles, including a tight Senate primary runoff against Senator John Cornyn. In a recent poll, Paxton edged ahead of Cornyn in the Texas Senate primary runoff. Meanwhile, a separate lawsuit from ActBlue accuses Paxton of political retaliation. The Texas attorney general’s office has also been involved in other high-profile cases, such as blocking The Onion’s takeover of Alex Jones’ Infowars.
The lawsuit underscores growing tensions between state regulators and big tech over data privacy. As streaming platforms increasingly adopt ad-supported models, Paxton’s case could set a precedent for how consumer data is handled in the digital age.
