NFLX Stock In Focus After Texas Sues Netflix For Allegedly Spying, Collecting Texan User Data

• Netflix has revealed user information to commercial data brokers and advertising technology firms; this data was combined with other information to build detailed consumer profiles, the lawsuit added. 
• It also alleged that the Netflix platform is designed to be ‘addictive,’ using features intended to manipulate users into taking actions the company wants them to take.
• The lawsuit seeks to halt the unlawful collection and disclosure of user data and requires Netflix to delete any data obtained without proper consent. 

Shares of Netflix, Inc. (NFLX) drew investor attention Monday after Texas Attorney General Ken Paxton filed a lawsuit accusing the streaming company of collecting user data without consumers' knowledge or consent.

The lawsuit alleged that Netflix engaged in data collection practices that effectively amounted to "spying on Texans, including children" by gathering information on what users watch and potentially other viewing behavior.

NFLX Draws Scrutiny 

The lawsuit stated that Netflix functions as a logging company that records and monetizes billions of behavioral events, with occasional movie streaming. The company employs intentional engineering to track and log users' viewing habits, preferences, devices, household networks, application usage, and other sensitive behavioral data.

“Netflix has built a surveillance program designed to illegally collect and profit from Texans’ personal data without their consent, and my office will do everything in our power to stop it,” said Attorney General Paxton.

The lawsuit added that Netflix has revealed user information to commercial data brokers and advertising technology firms. This data was combined with other information to build detailed consumer profiles. 

“Netflix users’ data is essentially shopped across Big Ad Tech’s shadowy network,” the lawsuit stated.

“Netflix is not the ad-free and kid-friendly platform it claims to be. Instead, it has misled consumers while exploiting their private data to make billions. I will continue to work to protect Texas families from deceptive practices by Big Tech companies and ensure that corporations are held accountable under Texas law,” added Paxton.

Lawsuit Says Netflix Platform Designed To Be Addictive

The lawsuit also alleged that the Netflix platform is designed to be ‘addictive,’ using features intended to manipulate users into taking actions the company wants them to take.

The lawsuit seeks to halt the unlawful collection and disclosure of user data and requires Netflix to delete any data obtained without proper consent. 

The lawsuit was filed on Monday, May 11, 2026. Netflix has not issued a public response as of this writing.

NFLX Stock: What Retail Thinks About It?

On Stocktwits, retail sentiment surrounding the stock has remained in the ‘bearish’ territory, while message volume has also stayed in the ‘normal’ zone in the past 24 hours.

Shares of Netflix have declined more than 6% so far this year.

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