Topline<\/p>\n
Texas Attorney General Ken Paxton sued Netflix on Monday, alleging the streaming service was \u201cspying\u201d on customers, including children, and misleading them about how much data it was collecting and addicting customers with \u201cdark pattern\u201d features like autoplay.<\/p>\n
Texas Attorney General Ken Paxton claimed the streaming service\u2019s data collection and targeted ads amounted to \u201cspying\u201d on customers.<\/p>\n
Getty ImagesKey Facts<\/p>\n
The suit, filed in a court in Collin County, alleges the company violated the Texas Deceptive Trade Practices Act, which bars companies from using \u201cfalse, misleading, or deceptive acts or practices,\u201d by allegedly misrepresenting that it did not collect data from users with paid accounts.<\/p>\n
The suit quotes Netflix leadership claiming it had \u201czero interest\u201d in pursuing advertising in the past, before changing their minds years later in 2022 once it had already \u201cstockpiled user data under those promises.\u201d<\/p>\n
It also accuses the company of telling \u201chalf the truth\u201d regarding its kids profiles\u2014alleging that even though it does not show children targeted ads, Netflix still \u201ccollects and analyzes a child\u2019s behavioral interactions through the same surveillance programs it uses for adults.\u201d<\/p>\n
The suit also claims Netflix misrepresents how it shares user data and that it uses \u201cdark patterns\u201d to addict customers to its platform, directly quoting marketing material from years past promoting \u201cbinge-watching\u201d Netflix shows.<\/p>\n
The suit claims Netflix conducted a \u201cyears-long bait-and-switch,\u201d first addicting customers to the platform, \u201cmining\u201d them for personal data, then finally selling that data back to advertisers to make \u201cbillions\u201d per year.<\/p>\n
Crucial Quote<\/p>\n
Paxton accused Netflix of building an illegal \u201csurveillance program\u201d to collect and profit from its users’ data. \u201cNetflix is not the ad-free and kid-friendly platform it claims to be. Instead, it has misled consumers while exploiting their private data to make billions,\u201d Paxton said in a statement on Monday. Netflix did not immediately respond to a request for comment from Forbes.<\/p>\n
Key Background<\/p>\n
Netflix exploded in popularity after launching its streaming video service in 2007, creating a tech and entertainment company now with a market cap of over $350 billion and turning co-founder and former CEO Reed Hastings<\/a> into a billionaire. The streaming service was ad-free for years, which Hastings previously touted as CEO. \u201cWe don\u2019t collect anything. We\u2019re really focused on just making our members happy, and we\u2019re not tied up with all that controversy around advertising,\u201d the lawsuit quotes Hastings saying during a January 2020 earnings call. Netflix finally did begin displaying ads in 2022, when Paxton\u2019s lawsuit claims it could start \u201cleveraging the mountains of data it quietly extracted from the children and families it kept fixated on their screens.\u201d Hastings stepped down as CEO in 2023, but served as the company\u2019s chair until April 2026.<\/p>\n Tangent<\/p>\n