• Texas Attorney General Ken Paxton filed a lawsuit accusing Netflix (NFLX) of collecting and sharing users' personal data without proper consent.
  • The suit alleges violations of the Texas Deceptive Trade Practices Act and the state's privacy laws, potentially exposing the streaming giant to significant penalties.
  • This legal action adds to growing regulatory scrutiny over data privacy practices in the tech and media sectors.

The state of Texas has filed a lawsuit against Netflix, accusing the streaming giant of unlawfully collecting and sharing consumers' personal data without their knowledge or consent. According to the complaint, Netflix allegedly tracked users' viewing habits, device information, and location data, then provided that information to third parties for advertising and analytics purposes. The suit, brought by Texas Attorney General Ken Paxton, claims violations of the Texas Deceptive Trade Practices Act and the state's privacy laws.

"Netflix has been spying on consumers and profiting from their personal data without permission," Paxton said in a statement. The Texas AG's office said it had been investigating the company's data practices for months and found evidence of widespread non-compliance. Netflix has not yet responded publicly to the allegations, and attempts to reach the company for comment were unsuccessful.

The lawsuit comes amid heightened regulatory focus on how streaming platforms handle user information. Industry observers note that Netflix, with over 280 million subscribers globally, is a prime target for such enforcement actions. The case could have broader implications for digital media companies, potentially forcing them to reevaluate data collection and sharing practices.

Texas has emerged as a leading state in privacy enforcement, having previously filed actions against other major tech firms. The suit seeks civil penalties of up to $10,000 per violation, which could amount to billions of dollars if the court finds widespread infractions. Legal analysts expect Netflix to contest the claims, arguing that users consented to data collection through its terms of service.

Netflix's most recent financial results showed strong subscriber growth and robust revenue, but this lawsuit introduces a new layer of regulatory risk. Shares of the company fell slightly in after-hours trading following the announcement. The case is likely to drag on for months, with potential outcomes ranging from a settlement to a court-ordered change in data practices.

Correction: An earlier version of this article incorrectly stated the penalty cap. The correct figure is $10,000 per violation.