Texas Attorney General Ken Paxton is taking aim at Netflix with a new lawsuit that accuses the streaming giant of secretly collecting user data, misleading subscribers about its advertising practices, and designing features that keep viewers — especially kids — glued to their screens.
Filed in Collin County District Court on May 11, the case alleges that Netflix violated the Texas Deceptive Trade Practices Act by engaging in what the state described as large-scale “surveillance” of Texans.
The lawsuit claims Netflix built a sophisticated data-tracking system that logs enormous amounts of user behavior, including clicks, pauses, watch history, and search activity, while failing to fully explain how that information was being used.
According to the complaint, Netflix processes more than 10 million user events per second and collects roughly five petabytes of behavioral data daily. Texas also alleges that the company shared or integrated user data with major advertising and data-tech platforms, including Google Display & Video 360, The Trade Desk, Experian, and Acxiom.
The case arrives as streaming companies across the industry continue to expand ad-supported subscription tiers and lean more heavily on audience analytics. Netflix spent years publicly distancing itself from advertising before launching its cheaper ad-supported plan in late 2022.
The lawsuit points to comments from former CEO Reed Hastings, who said in a 2020 earnings call that the company was not interested in “all that controversy around advertising.”
Texas argues that the company changed course without being fully transparent about how much user information it was collecting behind the scenes.
In a statement, a Netflix spokesperson pushed back hard on the allegations, saying, “This lawsuit lacks merit and is based on inaccurate and distorted information.”
The company also said it complies with privacy and data protection laws in all jurisdictions where it operates and defended its parental controls and kid-focused safety settings.
One of the more attention-grabbing parts of the lawsuit centers on Netflix’s autoplay feature, which Texas claims was intentionally designed to increase viewing time. The state argues that autoplay creates “a continuous stream of content intended to keep users, including children, watching for extended periods of time.”
Autoplay has become standard across streaming and social media platforms, including YouTube, Hulu, Disney+, and Prime Video.
The broader debate over addictive algorithms has been gaining traction well beyond streaming. Research from the National Institutes of Health has warned that recommendation systems and endless-scroll designs can create dopamine-driven “reward loops” similar to gambling mechanics.
Studies have also linked prolonged algorithm-driven engagement to anxiety, compulsive behavior, and attention issues in younger users whose decision-making systems are still developing.
Texas is now seeking court orders to block what it calls unlawful data-collection practices, require Netflix to disable autoplay by default on children’s profiles, and impose civil penalties.
