Texas Attorney filed a lawsuit accusing Netflix of secretly building a massive behavioral program
Netflix built its reputation on being a clean, ad-free alternative to the data-hungry corners of the internet. For years, it was the streaming service parents trusted and subscribers relied on no ads, no invasive tracking, just content. But according to Texas, that image was never the full picture.
Texas Attorney General Ken Paxton filed a lawsuit against Netflix, accusing the company of violating its own decade-long promises to subscribers and, more critically, of collecting detailed behavioral data from children without parental consent.
What Texas claims Netflix has been doing
The lawsuit, filed under the Texas Deceptive Trade Practices-Consumer Protection Act, argues that Netflix quietly constructed what the state describes as a behavioral surveillance operation of enormous scale one built on the back of users who believed they were simply watching TV.
According to the complaint, Netflix engaged in five core practices that Texas considers deceptive and harmful:
Fostering addiction through dark patterns — Netflix allegedly uses design features engineered to keep users on the platform longer than they intend, with autoplay being the most prominent example.
Tracking children’s viewing behavior — The lawsuit alleges that Netflix monitors what children click on, how long they watch, what they skip, when they pause, what they replay, and what draws their attention.
Collecting device and location data — Beyond viewing habits, Texas claims Netflix gathers information about what devices users own, what other apps are on their devices, and where they are located.
Sharing data with third parties — The complaint alleges Netflix has opened this trove of user information to data brokers.
Abandoning its ad-free promise — The state argues Netflix’s pivot to an ad supported tier was not simply a business evolution, but a calculated reversal of promises made to subscribers who chose the platform specifically to avoid that model.
Texas describes the operation as a bait and switch that ultimately led Netflix to the very place it once promised never to go profiting from user data by selling behavioral intelligence to global advertising companies.
What Netflix says in response
Netflix has pushed back firmly against the allegations. A company spokesperson told The Verge that the lawsuit is without merit and relies on inaccurate and distorted information. Netflix maintained that it takes member privacy seriously, complies with privacy and data protection laws in every market where it operates, and is confident in its parental controls and privacy practices. The company said it intends to address the attorney general’s allegations in court.
How big Netflix has become
Whatever the legal outcome, the lawsuit arrives at a moment when Netflix’s scale is difficult to overstate. The company reported total annual revenue of $15.79 billion in 2018. By early 2026, Netflix projected full year revenue of between $50.7 billion and $51.7 billion growth of roughly $35 billion in eight years.
Its subscriber base has expanded just as dramatically. Netflix ended 2018 with 139.26 million paid memberships globally. By the close of 2025, that number had surpassed 325 million, according to the company’s Q4 2025 shareholder letter.
Even subscriber churn appears to work in Netflix’s favor. According to data from Recurly, half of those who cancel Netflix return within six months, compared to an industry average of 34%, a gap that points to unusually strong brand loyalty.
What Texas is demanding
The state is seeking civil penalties of up to $10,000 per violation, with potentially broader penalties tied to cases involving elderly consumers. More consequentially, Texas is asking a court to order Netflix to fundamentally change how it operates within the state.
Specifically, Texas wants Netflix required to delete data it allegedly collected deceptively, prohibited from running targeted advertising without explicit informed consent, barred from collecting behavioral data from children without parental consent, and ordered to turn off autoplay as a default setting on children’s accounts.
What this means for subscribers
The Texas lawsuit doesn’t exist in a vacuum. In March 2026, a Los Angeles jury found that Meta and Google intentionally built addictive platforms that harmed a user’s mental health establishing a legal precedent that autoplay and infinite scroll features can be deemed harmful under the law. Paxton’s complaint against Netflix specifically names those same features, suggesting the Texas case may draw on that ruling.
For most Netflix subscribers outside Texas, little will change in the near term. The lawsuit’s immediate scope is limited to the state, and Netflix has signaled it plans to contest every allegation. Until a court rules otherwise, the platform will continue operating as it does today and, as has been the case with Meta and Google, the majority of users will likely keep watching regardless.