Texas sues Netflix for alleged "surveillance" of children and secret data sales
Experts say you need to get bored to become creative. In my experience, that's 100% true. Take kids, for example. When they are being punished for something and are not allowed screen time, they'll usually find a million interesting ways to play.
When bored, they invent so many wonderful games and let their imagination guide them within the world they've created. Unfortunately, despite all the great and useful things technology offers, it also makes it harder than ever to foster our children's healthy development.
It can hurt adults as well.
Often, we aren't even aware of the hidden dangers of some social media or streaming platforms. A recent example involves streaming king Netflix. What, you ask, could possibly be wrong with a wonderful tool that allows us to experience classic seventh-art achievements or have a laugh while relaxing with our favorite TV show after a hard day at work?
The state of Texas highlights several important concerns.
Texas alleges Netflix tracked children's viewing behavior and more
Texas Attorney General Ken Paxton has filed a lawsuit against Netflix, accusing the streamer of breaking its ad-free and kids' safety promise, reported The Verge.
Paxton v. Netflix, filed on Monday, May 11, recaps the promises Netflix previously made.
"For years, Netflix insisted it would never become another data-driven advertising company. It portrayed itself as a kid-friendly and ad-free Big Tech alternative," reads the document.
"But behind the scenes, Netflix quietly built a behavioral-surveillance program of staggering scale. At bottom, this program requires getting Texans and their children glued to the screen and then extracting every possible piece of data about them while they are there."
Texas argues in the lawsuit that Netflix built the platform to:
- Foster user addiction: "Netflix uses dark patterns to do this discreetly. Dark patterns are subtle features engineered to manipulate users to take the actions Netflix wants them to take," reads the lawsuit, naming the autoplay feature as one example.
- Surveil children's activity: Texas lawsuit alleges that Netflix is tracking children's clicks, how long they watch, what they avoid, when they pause, what draws them in, what they replay or skip, where they are, what devices they use, what other devices are in their home, what other apps they interact with, and more.
"Each action is a data point revealing something about the user. This is not simply about deciding what show to queue up next. It is about learning who the users and their children are," reads the lawsuit.
The state argues that Netflix's pivot to an ad-supported model was not just a business shift, but a betrayal of a decade-long promise to exclude the invasive tracking inherent to the digital advertising industry.
Related: Netflix subscribers say these 5 issues drive them to cancel
The streaming service is accused of opening this information to data brokers.
"Netflix's years-long bait-and-switch has led the company right to where it promised never to be: addicting children and families to its platform, mining those users for data, and then converting that data into lucrative intelligence for global advertising juggernauts."
Netflix says lawsuit "lacks merit," plans to address allegations in court
In an emailed statement to The Verge, Netflix spokesperson Jamil Walker said the Texas lawsuits "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," Walker added.
Netflix revenue grew by around $35 billion in 8 years
Meanwhile, the streaming giant has grown rapidly. According to Netflix's 2018 10-K Filing with the Securities and Exchange Commission (SEC), the company reported a total annual revenue of $15.794 billion.
Fast forward to eight years later. In its Q1 2026 shareholder letter, Netflix officially projected full-year 2026 revenue of between $50.7 billion and $51.7 billion.
Netflix maintains exceptionally good resubscription metrics. In fact, half of those who cancel Netflix return within six months, usually attracted by a special original release, according to data from Recurly.
For comparison purposes, the industry average is 34% of canceled subscribers returning within six months, confirming that "Netflix's ability to win back customers stands out."
Additionally, the streaming giant has been growing its massive subscriber base. It ended 2018 with 139.26 million paid memberships globally, according to the company's Form 10-K filing with the SEC.
Netflix now boasts more than 325 million paid subscribers, according to Netflix's official Q4 2025 shareholder letter released on Jan. 20, 2026.
What Texas demands from Netflix
"The state is seeking civil penalties of up to $10,000 per violation, along with potentially broader penalties involving elderly consumers," writes Texas Policy Research.
More importantly, Texas is demanding injunctive relief that could force Netflix to fundamentally change its business operations within the state.
"Among the remedies requested, Texas wants Netflix ordered to purge data deceptively collected from Texans, while also seeking to prohibit targeted advertising without express informed consent, as well as wanting Netflix barred from collecting children's behavioral data without parental consent. The Attorney General also requests that autoplay default settings on children's accounts be turned off," adds Texas Policy Research.
What Texas lawsuit against Netflix means for the streamer, subscribers
In March 2026, a Los Angeles jury "found that Meta, which owns Instagram, Facebook, and WhatsApp, and Google, owner of YouTube, intentionally built addictive social media platforms that harmed [a] 20-year-old's mental health," reported BBC.
While the Texas lawsuit stands on its own merits under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), analysts are already drawing parallels to the March 2026 California verdict against Meta and YouTube.
In that case, a jury established that 'infinite-scroll' and 'autoplay' loops could be deemed legally harmful, a precedent that Attorney General Paxton appears to be leveraging by specifically naming those same features in his complaint against Netflix.
Netflix is up for a legal battle, but what does this mean for subscribers?
Probably nothing, until the lawsuit is resolved. Even then, it would only affect Netflix operations within Texas, unless the streamer decides to change how its platform works across the country.
In the meantime, just as with Facebook and Meta users, the majority of Netflix subscribers will probably continue to use the platform, not paying much attention to the accusations unless they feel personally affected.
Related: Spotify surprises subscribers with a major new free addition
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This story was originally published May 15, 2026 at 4:03 PM.