Texas sues Netflix over alleged covert data collection and addictive design

Texas Attorney General Ken Paxton filed suit against Netflix on Monday, accusing the streaming company of collecting data from children and other users without consent, then selling or sharing that information with data brokers and ad-tech companies — all while publicly claiming it did not collect or share user data.

The lawsuit also alleges Netflix deliberately engineered its platform to be addictive, compounding the harm to users who were unaware their viewing habits and preferences were being monetized. Texas claims the practices generated billions of dollars annually for the company.

The action is part of a broader wave of state-level data privacy enforcement that has accelerated since the FTC's capacity to pursue Big Tech has been questioned in Washington. For investors, the case adds regulatory overhang to Netflix's ad-supported tier, which depends heavily on behavioral data…