Texas Attorney General Ken Paxton has sued Netflix for allegedly spying on children and collecting user data without consent.
The lawsuit, filed Monday morning, claims that the streaming company violated the Texas Deceptive Trade Practices-Consumer Protection Act, saying that “Netflix has engaged in false, deceptive, or misleading acts and practices in the course of trade and commerce.”
In the filing, The Texas AG says that Netflix has been collecting information including what subscribers are watching and when, how users engage with content, and more, and has been giving that data to advertisers with subscribers knowing or agreeing, due to “deceptive disclosures.”
The filing quotes CEO Reed Hastings, who was emphatic about the company not bringing advertising to the platform for years, calling the lack of advertising on Netflix “a core differentiator” in a 2018 earnings call. Because Netflix wasn’t dealing with advertisers, there was no need to collect so much user data and the company prided itself on being a safe platform for users. That was even more true for children, thanks to Netflix keeping Kid profiles separate from regular user profiles and ensuring safe and age appropriate content and full parental control.
Now, the lawsuit says, Netflix is going back on the promised made to users. The state alleges that Netflix has created “a “massive data pipeline” to keep track of user activity.
Ahead of introducing ad-supported plans in November 2022, the terms and conditions were updated to include language about advertising. However, the state says that the terms did not specify what information was being collected or who would have access to it, saying that the terms are “vague, deceptive, and incomplete.”
The lawsuit goes one step further for those with kids, saying that Netflix has lied to parents when assuring that kids’ profiles are kept separate and not used for advertising decisions. It claims that Netflix is gathering the same type of data from kids’ profile, while claiming in its Help Center that “no behavioral advertising” is linked to the profiles, giving the illusion of privacy.
In addition to collecting data, the AG says that Netflix has purposely engaged in practices that make the platform addicting to users, saying “Netflix never told Texans that its platform is engineered to be addictive. It never disclosed that autoplay is a dark pattern designed to override conscious decision-making, extend viewing sessions, and eliminate stopping cues. It never warned parents that autoplay is particularly harmful to children.”
Watchtime is an important metric for streaming services, and the autoplay feature can encourage users to keep watching for longer than they otherwise would. The lawsuit calls this the “final piece of the bait-and-switch.”
Update: Netflix has responded to the lawsuit with the following statement. “Respectfully to the great state of Texas and Attorney General Paxton, this lawsuit lacks merit and is based on inaccurate and distorted information. Netflix takes our members’ privacy seriously and complies with privacy and data‑protection laws everywhere we operate. We look forward to addressing the Texas Attorney General’s allegations in court and further explaining our industry-leading, kid‑friendly parental controls and transparent privacy practices.”