Texas Sues Netflix for Allegedly Spying on Users and Kids — But the Streaming Giant May Just Be Part of a Much Bigger Data Machine

Netflix may know a lot more about you than what you binge-watch on Friday nights.

Texas Attorney General Ken Paxton sued Netflix this week, accusing the streaming giant of illegally collecting and selling user data while designing features meant to keep adults and children glued to their screens.^[1]

“Netflix invested in a massive logging operation to record and monetize billions of behavioral 'events’,” Paxton wrote in the filing, based on remarks made in a ten-year-old AI Council video from Peter Bakas, then ‘Dir Eng’ of Netflix.^[2]

Texas also claims the company shared that information with advertisers, analytics firms, and data brokers despite allegedly telling users it did not use viewing data for ad targeting.

Netflix has denied the allegations.

"Respectfully to the great state of Texas and Attorney General Paxton, this lawsuit lacks merit and is based on inaccurate and distorted information," Netflix responded in a statement, pointing to their privacy disclosures.^[3]

But privacy advocates say the lawsuit touches on a broader reality most internet users rarely think about: Streaming platforms, apps, and websites routinely collect detailed behavioral data — and Netflix may be far from unique.

Texas says Netflix built a surveillance machine

State officials allege that the company collected data on user engagement patterns, device information, household identifiers, and behavioral activity across profiles, including profiles created for children.

Netflix's own privacy policy documents what the company collects from subscribers: viewing and search history, device identifiers, IP addresses, inferences about household preferences, and voice recordings from voice-enabled features. Netflix also acknowledges collecting data from third-party advertisers about users' likely interests, based on activity across other websites and apps.

“Texans would be shocked to learn how extensively Netflix shops their data across Big Ad Tech’s shadowy networks,” Paxton wrote in the filing.

The suit also targets Netflix's autoplay features, which it describes as dark patterns designed to maximize engagement and encourage compulsive viewing habits. That same feature is live on other streaming platforms, such as YouTube. Still, Texas is seeking civil penalties and wants autoplay disabled by default on children’s accounts.

The lawsuit sparked concerns about how streaming platforms have become embedded in the broader online advertising and data-broker ecosystem, turning viewing habits into valuable behavioral data.

Seemingly harmless data, like what users watch, click, or search for, can be combined with other information to build highly detailed consumer profiles. Those profiles can then feed targeted advertising systems, recommendation engines, and even surveillance-based pricing, where users may see different offers or prices based on that data.

The real issue is the data broker pipeline

Many consumers underestimate how much data companies collect from everyday browsing and streaming. According to an All About Cookies survey on big tech, 64% of Americans say they trust Netflix, making it one of the most trusted tech companies in the country.

But that trust may be built on a shaky foundation. A separate All About Cookies survey on internet cookies found that roughly 1 in 4 Americans accept cookies without understanding what they do. When people don't understand how tracking works, they have no reason to question the companies doing it.

That gap between trust and awareness is exactly the environment in which this lawsuit operates.

Netflix would hardly be the only company of its caliber to collect data on a massive scale; social media platforms, retailers, search engines, and smart TVs all gather behavioral data for profiling and advertising.

In many cases, user data eventually ends up in the hands of data brokers. These companies buy, aggregate, and sell personal information.

While the lawsuit against Netflix is still in its early stages, and none of the allegations have been proven true, it’s worth treating all streaming apps the way you would treat social media platforms: Assuming some level of tracking is taking place.

What you can do about it

If you have children on your account, it's worth reviewing their profile settings and disabling autoplay manually until the lawsuit plays out.

More broadly, there are a few steps anyone can take to reduce how much data gets collected:

1. Reviewing social media privacy settings
2. Limiting ad personalization
3. Rejecting unnecessary cookies
4. Regularly deleting unused accounts
5. Limiting website tracking

That said, once your data enters the data-broker environment, it can continue to circulate long after its original collection. That’s why a great data removal service is key to scrubbing your personal information from broker databases entirely.

Look for a service that automatically sends removal requests to a broad range of broker sites and monitors for re-listing, since data that gets removed often reappears after a few months. For example, Incogni covers 420+ data broker sites, sends verified removal requests, and reruns them on a rolling basis so your information doesn't quietly resurface.

See our picks for the best data removal services.

Bottom line

The Netflix lawsuit is still in its early stages, and none of the allegations have been proven in court. But you don't need to wait for a verdict to take your data seriously.

Whether or not Netflix specifically sold your viewing history, the broader ecosystem the lawsuit describes — where behavioral data flows from apps to brokers to advertisers — is well-documented and ongoing.

Reviewing your privacy settings is a start. But since data already in broker databases doesn't disappear on its own, using a removal service to actively scrub it is one of the more effective steps you can take.