Texas Sues Netflix Over Alleged Data Collection on Children

Texas Attorney General Ken Paxton sued Netflix (NFLX) on Monday, alleging the company collected data on children and other consumers without consent and designed its platform to be addictive, according to Reuters.

Details of the Lawsuit

Texas claims that for years Netflix falsely represented that it did not collect or share user data, while actually tracking and selling viewing habits and preferences, generating billions of dollars annually. The complaint also accuses Netflix of using "dark patterns" such as autoplay to keep users watching, with the goal of "getting children and families glued to the screen, harvesting their data, and monetizing it for profit."

Company's Response

A Netflix spokesperson called the lawsuit "without merit" and based on "inaccurate and distorted information," adding that the company complies with privacy and data protection laws in all its markets.

Precedents and Context

This is not Netflix's first privacy-related challenge, but it is the first major state lawsuit targeting child data collection. It comes amid heightened regulatory scrutiny of big tech in the U.S. and Europe.

Potential Financial Impact

The lawsuit demands that Netflix purge illegally collected data, cease using it for targeted advertising without consent, and pay civil fines of up to $10,000 per violation. The total number of violations has not been disclosed but could be substantial given Netflix's large user base in Texas.