Texas Sues Netflix for Collecting User Data Without Consent and Using Addictive Design

Netflix faces a lawsuit in Texas over allegations that it collects data from children and adults in the state without consent and employs addictive design to retain users.

Attorney General Ken Paxton accused the streaming service of spying on Texans. He said it records and monetizes billions of pieces of information on user behavior on the platform, even while suggesting it does not.

"Every interaction on the platform became a data point revealing information about the user," Paxton's office stated.

Netflix rejected the claims and said it will fight them in court, according to a statement provided to Reuters.

"Respectfully to the great state of Texas and Attorney General Paxton, this lawsuit lacks merit and is based on inaccurate and distorted information," a Netflix spokesperson told the news agency.

"Netflix takes our members' privacy seriously and complies with privacy and data protection laws everywhere we operate."

"When you watch Netflix, Netflix watches you," the complaint filed Monday by Texas' top prosecutor states.

The filing says Netflix positioned itself as different from other big tech companies in data processing and user advertising.

It quotes former Netflix chief executive Reed Hastings as saying in 2019 and 2020 that the company did not collect or monetize user data, such as for ad sales.

But the complaint alleges Netflix combined addictive design features, including auto-playing content, with extensive logging of user activity to keep people on the site.

Among billions of technical events recorded were user clicks, lingers and durations, the filing adds.

In 2022, the company began sharing data quietly extracted from children and families with commercial data brokers to generate billions in revenue, it says.

"In short, Netflix sold subscriptions to its programming as an escape from Big Tech surveillance: pay monthly, avoid tracking," the lawsuit states.

Paxton's office said Netflix violated the Texas Deceptive Trade Practices Act, which prohibits false, deceptive or misleading acts in trade and commerce.

The attorney general can seek penalties against violators.

Here, the state wants a court to order Netflix to delete data deceptively collected from Texans, stop processing it for targeted advertising and disable auto-play by default on children's profiles.

The case arrives amid pressure on platforms to turn off features like auto-play and infinite scroll over concerns they keep users hooked on content.