Netflix NFLX.O was sued on Monday by Texas Attorney General Ken Paxton, who accused the streaming company of spying on children and other consumers by collecting their data without consent, and designing its platform to be addictive.
Texas said that for years, Netflix has falsely represented to consumers that it did not collect or share user data, when it actually tracked and sold viewers’ habits and preferences to commercial data brokers and advertising technology companies, making billions of dollars a year.
The Los Gatos, California-based company was also accused of quietly using “dark patterns” to keep users watching, including an autoplay feature that starts a new show when a different show ends.
A Netflix spokesperson said the company plans to address the allegations in court.
“Respectfully to the great state of Texas and Attorney General Paxton, this lawsuit lacks merit and is based on inaccurate and distorted information,” the spokesperson said in a statement. “Netflix takes our members’ privacy seriously and complies with privacy and data protection laws everywhere we operate.”
Many companies, including social media and other businesses with strong online presences, are targets of lawsuits accusing them of quietly tracking users and selling the resulting data to third parties, who use the data for advertising.
Texas’ complaint quoted Netflix co-founder and Chairman Reed Hastings as saying in 2020, “we don’t collect anything,” as he sought to distinguish Netflix’s approach to data collection from the approaches of Amazon.com AMZN.O, Facebook META.O and Google GOOGL.O.
“Netflix’s endgame is simple and lucrative: get children and families glued to the screen, harvest their data while they are stuck there, and then monetize the data for a handsome profit,” according to Texas’ complaint filed in a state court in Collin County, near Dallas.
“When you watch Netflix, Netflix watches you,” the complaint added.
Paxton said Netflix’s alleged surveillance violates the Texas Deceptive Trade Practices Act.
He wants the company to purge data it collected illegally, not use the data for targeted advertising without users’ consent, and pay civil fines of up to $10,000 per violation.
Paxton, a Republican, is running for the U.S. Senate, challenging incumbent Republican Senator John Cornyn.
(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama)
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