Texas Sues Netflix Over Alleged Unauthorized Data Collection and Sharing Practices
The state of Texas is suing Netflix for allegedly operating a "surveillance machinery" that collects and shares sensitive user data with advertisers without proper consent.
The state of Texas has filed a lawsuit against Netflix, alleging that the streaming giant has engaged in unauthorized collection and distribution of subscriber data to advertisers and data brokers. Texas Attorney General Ken Paxton claims that the company has built a "surveillance machinery" that tracks user behavior, preferences, and location, despite public assertions from leadership that the platform does not engage in such data harvesting The Record.
According to the legal complaint, Netflix utilizes "intentional engineering" to monitor and log granular details about its users, including viewing habits, device information, household network data, and application usage. The lawsuit alleges that the company collects approximately 5 petabytes of user behavior logs daily. This data is reportedly merged with demographic information and location data derived from IP addresses to create highly specific audience segments for hyper-targeted advertising The Record.
The lawsuit further contends that Netflix shares this sensitive information with third-party entities, including major data brokers like Experian and Acxiom, as well as ad tech platforms such as Google Display & Video 360. By integrating its internal logs with external datasets, the company allegedly allows its user data to be "shopped across Big Ad Tech’s shadowy network," generating billions of dollars in annual revenue through these practices The Record.
A significant portion of the allegations focuses on the treatment of children's profiles. While Netflix markets these profiles as a "safe area" for children 12 and under and does not display targeted ads to them, the lawsuit claims the company "aggressively" collects behavioral data from these accounts. Texas is seeking a court mandate to force Netflix to disable the default autoplay feature on children's profiles and to cease the alleged unauthorized collection and sharing of user data The Record.
The legal filing highlights a discrepancy between the company's public statements and its internal operations. The lawsuit cites a 2020 earnings call where then-CEO Reed Hastings claimed the company did not "collect anything," contrasted with a 2016 conference presentation where a Netflix engineer reportedly described the company as a "logging company that occasionally streams movies" The Record.
Netflix has formally denied the allegations, characterizing the lawsuit as lacking merit and based on "inaccurate and distorted information." A company spokesperson stated that Netflix complies with all applicable privacy and data-protection laws and maintains "industry-leading, kid-friendly parental controls." The company also noted that it updated its privacy policy in 2024 following inquiries from Dutch regulators, though the Texas lawsuit maintains that these updates remain "vague, deceptive and incomplete" The Record.
This litigation highlights the ongoing tension between consumer privacy expectations and the data-driven business models of major streaming platforms. As regulators globally increase scrutiny on how digital services track user behavior, the outcome of this case may set a significant precedent for how companies are required to disclose and obtain consent for the massive volumes of behavioral data they collect.