Netflix built its brand on a simple, compelling promise: pay a monthly subscription, watch what you want, and leave the surveillance capitalism of the ad-supported internet behind. According to Texas Attorney General Ken Paxton, that promise was a lie. In a 59-page lawsuit filed in Collin County, Texas, Paxton accuses Netflix of secretly building a large-scale behavioural surveillance operation — tracking every interaction its users and their children had on the platform, and selling that data to commercial data brokers and advertising technology companies while publicly denying it did so. Netflix has called the lawsuit without merit. The dispute goes to the heart of one of the most consequential questions in modern digital privacy: when a company tells you it does not track you, what is it actually doing with your data?
The Core Allegation: Said One Thing, Did Another
The Texas lawsuit rests on a straightforward but serious claim: Netflix made repeated public statements that it did not collect or integrate user data — and was simultaneously running a large-scale data collection programme that contradicted those statements in every meaningful way.
The complaint opens by citing a 2019 statement by then-CEO Reed Hastings in which he said the company was focused on keeping members happy and was "not involved in the advertising controversy." In 2020, Hastings reportedly went further, stating the company "does not integrate user data" and adding: "we don't collect anything." Texas argues those statements were made deliberately to keep Netflix out of the public controversies that were engulfing Meta, Apple, and other tech companies over data practices at the time — and that they were false.
According to Paxton's office, Netflix was already running what the lawsuit describes as "a behavioural-surveillance program of staggering scale" — tracking and recording what users watched, what they searched for, what devices they used, which home networks they connected from, and how they interacted with the application. The lawsuit states pointedly: "When you watch Netflix, Netflix watches you."
"Netflix sold subscriptions to its programming as an escape from Big Tech surveillance: pay monthly, avoid tracking. Texans trusted that bargain. Netflix broke it — constructing the very data-collection system subscribers paid to escape."— Texas v. Netflix Lawsuit, Filed May 2026
What Texas Alleges Was Collected and Sold
The 59-page complaint describes Netflix as using "intentional engineering" to systematically harvest user data across every interaction on the platform. According to the lawsuit, the data collected included:
- →Viewing history, search behaviour, and content preferences — building detailed profiles of individual taste and habits
- →Device identifiers and household network data — enabling cross-device tracking and household-level profiling
- →Application usage patterns — granular behavioural data about how users navigate and interact with the platform
- →Data from children's profiles — collected from Kids accounts despite Netflix's public positioning of its Kids section as a specially designed, protected environment for children
Texas alleges that Netflix did not use this data solely for internal purposes such as content recommendations. Instead, the lawsuit claims the company sold the data to commercial data brokers and advertising technology companies, generating what Paxton's office describes as "billions of dollars" annually — earnings that Texas argues came directly from exploiting subscriber data that users were explicitly told was not being collected.
The complaint notably references a 2024 ruling by the Dutch Data Protection Authority, which separately found that Netflix does not disclose the true scale or granularity of its data collection practices to users — lending the Texas allegations a degree of external corroboration that may complicate Netflix's legal defence.
"Netflix has built a surveillance program designed to illegally collect and profit from Texans' personal data without their consent. Netflix 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."— Texas Attorney General Ken Paxton
Netflix's Response: "Lacks Merit"
Netflix has rejected the lawsuit categorically. Spokesperson Jamil Walker stated: "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."
The company's position will need to address several significant challenges. The Dutch Data Protection Authority's 2024 ruling that Netflix does not disclose the true scale of its data collection is directly referenced in the Texas complaint and cannot easily be dismissed as a domestic political action. The explicit CEO statements quoted in the lawsuit are matters of public record. And the shift from a purely subscription-based model to the introduction of an ad-supported tier — which Netflix launched in 2022 — makes the company's data collection practices a directly material commercial question.
The lawsuit also describes Netflix's business model in deliberately provocative terms: "A logging company that records and monetizes billions of behavioral events — and occasionally streams movies." Whether or not that framing survives legal scrutiny, it encapsulates the core concern that will drive this case and the broader conversation about streaming platform data practices.