One of the world’s leading streaming entertainment platforms, Netflix, is now facing a high-stakes legal battle in the U.S. state of Texas, brought by state Attorney General Ken Paxton. The lawsuit, filed Monday, levels three core allegations against the company: unauthorized collection of user data, deceptive marketing about its data practices, and deliberate use of addictive design features to hook consumers, including minors.
In the official court filing, Paxton accused the streaming giant of running a covert surveillance operation that captures and monetizes billions of individual user interaction data points, directly contradicting public promises the company has made for years. The attorney general’s office emphasized that every single action a user takes on the platform, from clicks to how long they linger on a specific title, is logged as a trackable data point that reveals deeply personal insights about user preferences and behavior.
The complaint highlights a clear contradiction between Netflix’s public positioning and its internal practices. For years, the company framed itself as a privacy-friendly alternative to other major technology firms, citing former CEO Reed Hastings’ public comments in 2019 and 2020 that Netflix never collected or monetized user data for advertising purposes. The lawsuit argues this positioning was a deliberate sales tactic: Netflix marketed paid subscriptions as a way for consumers to escape the pervasive data surveillance common to other big tech platforms, claiming that a monthly subscription would free users from unwanted tracking.
Texans accepted this bargain, the filing says, but Netflix ultimately betrayed that trust. Beyond unauthorized data collection, the lawsuit alleges Netflix intentionally built addictive user experience features, including the default auto-play function for next episodes, to keep users glued to screens for extended periods. Most notably, the complaint claims that starting in 2022, Netflix began monetizing the massive trove of data it quietly collected from children and family users by sharing this information with third-party commercial data brokers, generating billions of dollars in additional revenue from the practice.
Paxton’s office argues that these actions directly violate Texas’ Deceptive Trade Practices Act, which bans false, misleading and deceptive business practices. The state is seeking several major remedies: a court order forcing Netflix to delete all improperly collected data from Texas users, an end to using Texans’ data for targeted advertising, and a requirement that auto-play be turned off by default for all children’s user profiles on the platform.
This legal action comes amid a growing national reckoning over the harms of addictive platform design and unauthorized data collection. Policymakers and public health advocates have increasingly called for platforms to disable default features like auto-play and infinite scroll, citing mounting research that these design choices contribute to unhealthy screen dependency, particularly among young users. Legal observers also note that this lawsuit follows a recent high-profile win for plaintiffs in California, where a court found Meta and YouTube could be held liable for the addictive design of their platforms. That ruling has already paved the way for a wave of similar legal challenges against major tech and streaming companies across the country.
Netflix has flatly denied all allegations, saying it will vigorously defend itself against the lawsuit in court. In an official statement shared with Reuters, a company spokesperson pushed back against the claims, arguing the lawsuit is entirely without merit and relies on distorted and inaccurate information about Netflix’s practices. “Netflix takes our members’ privacy seriously and complies with privacy and data protection laws everywhere we operate,” the spokesperson said. The BBC has also reached out to Netflix for additional comment, as of this reporting no further statement has been released.