Texas Attorney General Ken Paxton alleges that Netflix violated state laws against deceptive trade practices by collecting and monetizing viewing habits, location data, and nearly every button click on its interface, all while marketing itself as a safe harbor from the surveillance tactics of other big tech companies.
The lawsuit argues that Netflix built its brand on promises from former chief executive Reed Hastings that the company had “zero interest” in advertising and would not mine user data for commercial gain. According to the complaint, Netflix positioned itself as the “anti–Big Ad Tech refuge” while quietly amassing detailed consumer profiles that now generate billions of dollars in revenue. The state contends that the company’s paid subscription model falsely implies that users are shielded from data-driven advertising.
Netflix tracks and logs a vast range of user activity, including keyword searches, pauses, fast-forwards, and viewing history, the suit alleges. The company then uses this information to build behavioral profiles that power its advertising business, a practice Paxton’s office says contradicts the company’s earlier public commitments. “For years, Netflix’s leadership told the world it had ‘zero interest’ in advertising,” the complaint states. “But once Netflix had stockpiled user data under those promises, it flipped the script and built an ads business that mirrors everything it once attacked.”
The case also targets the platform’s design, claiming that features like autoplay are intentionally addictive. The complaint references separate litigation in which juries found that social media platforms such as Facebook and YouTube were similarly designed to keep users engaged for longer periods, often at the expense of their well-being. Paxton’s legal team is drawing on a product liability playbook that has proven successful against other major tech companies in recent years.
Big Tech platforms including Meta’s Facebook and Google-owned YouTube have been found liable in lawsuits brought under state laws that prohibit misleading the public, knowingly endangering children, or negligently designing addictive products. Paxton’s case was filed under Texas’ Deceptive Trade Practices Act, a statute that allows the state to pursue penalties against companies that engage in false or misleading business conduct.
The lawsuit marks the latest escalation in a broader regulatory crackdown on the data practices of major technology firms. Texas has emerged as a particularly aggressive battleground, with Paxton’s office pursuing multiple actions against companies accused of exploiting user data or designing platforms that harm minors. The Netflix suit extends that scrutiny to the streaming industry, which has largely avoided the same level of legal pressure faced by social media companies.
Netflix has not yet filed a formal response to the complaint. The company did not immediately comment on the allegations. The case is expected to test whether the legal frameworks applied to social media platforms can be successfully extended to subscription-based streaming services that have recently expanded into advertising-supported tiers.
