A lawsuit filed Monday by Texas Attorney General Ken Paxton targets Netflix $NFLX over what the state characterizes as years of unauthorized data collection, secret sales of user information to outside parties, and deliberate deception of consumers about those practices.
According to the complaint, filed in Collin County state court near Dallas, Netflix compiled detailed records on its users — spanning what they watched, what devices they used, and how they behaved across the platform — and transferred that information to data brokers and ad-tech firms operating in the commercial marketplace. Those data sales have generated substantial annual revenue for the company, the state alleges.
Among the evidence cited in the filing is a 2020 remark by Reed Hastings, then Netflix's chief executive, who told audiences "we don't collect anything" — a claim the state argues sits at the heart of the company's long-running deception, according to Reuters. The lawsuit summarized the alleged conduct this way: "When you watch Netflix, Netflix watches you."
The complaint also targets Netflix's platform design, arguing the company built features intended to manipulate user behavior. The autoplay function, which automatically begins playing the next piece of content, is cited as a tool designed to keep users — including children — watching for extended periods.
"Netflix has built a surveillance program designed to illegally collect and profit from Texans' personal data without their consent, and my office will do everything in our power to stop it," Texas Attorney General Ken Paxton said in a statement. "Netflix is not the ad-free and kid-friendly platform it claims to be."
Paxton is seeking relief under the Texas Deceptive Trade Practices Act. The lawsuit asks a court to halt Netflix's data collection and disclosure practices, require the company to turn off autoplay by default on children's profiles, and impose civil penalties. Reuters reported that the company had not returned a request for comment.
The lawsuit comes as Netflix has been raising subscription prices across all of its U.S. tiers. The company expects 2026 revenue of between $50.7 billion and $51.7 billion, driven in part by advertising revenue it projects will almost double compared to the prior year. Netflix's subscriber base tops 325 million.