Texas Attorney General Ken Paxton sued Netflix on Monday, alleging the streaming service spies on children and consumers by harvesting their data without consent while engineering its platform to promote addiction.

The lawsuit claims Netflix has misled users for years by stating it does not collect or share personal information, yet it tracks viewing habits and preferences, selling them to data brokers and advertising tech firms for billions in annual revenue.

The California-headquartered company also faces accusations of deploying "dark patterns," such as autoplay that automatically launches the next episode or show to extend watching time.

Netflix issued a statement indicating it will challenge the claims in court.

"We respectfully submit to the state of Texas and Attorney General Paxton that this lawsuit has no basis and stems from flawed and misrepresented facts," the spokesperson said. "Netflix values our members' privacy and fully complies with data protection laws across all markets."

'When you watch Netflix, Netflix watches you'

Social media platforms and other digital companies frequently encounter lawsuits for secretly monitoring users and selling the data to third parties for targeted advertising purposes.

Texas' legal filing references Netflix co-founder and Chairman Reed Hastings' 2020 remark, "we don't collect anything," as he differentiated the service from competitors like Amazon, Facebook, and Google.

"Netflix's objective is clear and highly profitable: hook children and families to screens, gather their data amid prolonged sessions, and cash in on it," states the complaint filed in Collin County state court near Dallas.

"When you watch Netflix, Netflix watches you," the document emphasizes.

Paxton argues Netflix's surveillance tactics violate the Texas Deceptive Trade Practices Act.

He seeks an order for Netflix to delete illegally gathered data, prohibit its use in targeted ads without explicit consent, and impose civil penalties up to $10,000 per violation.

Paxton, a Republican, is vying for a U.S. Senate seat against incumbent Republican Senator John Cornyn.