The Texas Attorney General has filed a new consumer-protection lawsuit against Netflix, alleging that the company misled Texans by marketing itself as an ad-free, kid-friendly alternative to Big Tech while allegedly building a large-scale system for collecting and monetizing user data. The complaint claims that Netflix repeatedly assured consumers that its paid subscription model separated it from advertising-driven platforms, including statements that Netflix did not sell ads, did not sell data, and operated as a “safe respite” from companies that exploit users through advertising. According to the complaint, Netflix later reversed course by launching and expanding an advertising business that allegedly relies on behavioral data, identity matching, third-party data partners, and ad-tech platforms.
The lawsuit also focuses heavily on children’s use of Netflix, alleging that the company encouraged parents to create kids’ profiles by describing them as kid-friendly spaces while failing to clearly disclose the extent to which Netflix allegedly collects and analyzes children’s behavioral interactions. Texas claims Netflix’s assurances that kids’ profiles are not used for behavioral advertising created a misleading impression because, according to the complaint, Netflix still collects granular data about what children watch, rewatch, abandon, search, and how they interact with the platform. The complaint further alleges that Netflix uses design features such as autoplay to extend viewing sessions, including on kids’ profiles, thereby increasing both screen time and the amount of behavioral data generated.
Texas brings the action under the state’s Deceptive Trade Practices Act and seeks civil penalties, attorneys’ fees, disgorgement, and temporary and permanent injunctive relief. Among other remedies, the complaint seeks to require Netflix to purge what is alleged to be deceptively- collected Texans’ data; obtain express and informed consent before using Texans’ data for targeted advertising; stop collecting children’s behavioral data without parental consent; turn autoplay off by default for kids profiles; and restrict clean-room data collaboration involving Texas consumers without adequate disclosure. To read the full petition click here.