TLDR
- Florida Attorney General James Uthmeier sued Netflix on Wednesday over alleged deceptive data collection practices, including from children’s profiles.
- The state is seeking billions in damages and wants Netflix to delete data collected from Florida users.
- Florida alleges Netflix promised an ad-free, privacy-focused service while secretly building a behavioral data operation to later launch its ad business.
- NFLX dropped nearly 1% to $76.03 on Wednesday and is down around 19% year to date.
- Netflix denied the claims, calling the lawsuit meritless and said it plans to defend itself in court.
Florida has sued Netflix, accusing the streaming company of misleading subscribers about its data collection practices and improperly gathering information from children. The lawsuit was filed Wednesday by Attorney General James Uthmeier and is seeking billions of dollars in damages.
NFLX stock dropped nearly 1% to $76.03 on Wednesday following the news. The stock is already down about 19% year to date.
The 66-page complaint alleges Netflix spent years telling subscribers that paying a monthly fee meant escaping the data-driven advertising model used by other tech platforms. Florida says that promise was false.
“Netflix told Florida families they could pay a monthly fee to escape Big Tech surveillance. That was false,” Uthmeier said in a statement announcing the lawsuit.
The complaint cites former CEO Reed Hastings, who said during a 2020 earnings call that Netflix was “not integrating everybody’s data,” adding, “We don’t collect anything.” Florida says those statements were misleading.
According to the complaint, Netflix tracked billions of user interactions, including what subscribers watched, searched, paused, rewound, skipped, and abandoned, along with device and location data. Florida says Netflix used that infrastructure to support the ad-supported tier it launched in November 2022.
Kids Profiles Under Fire
A major focus of the lawsuit is Netflix’s Kids Profiles. Florida alleges Netflix marketed these as dedicated, safe spaces for children while still collecting and analyzing their viewing behavior through the same tracking systems used for adult accounts.
The state also accuses Netflix of using “dark patterns” to keep young viewers engaged. Specifically, Florida points to autoplay being enabled by default on Kids Profiles, claiming it was designed to extend viewing sessions and generate more behavioral data from children.
Florida argues these practices violated the Florida Deceptive and Unfair Trade Practices Act and the Florida Digital Bill of Rights. The state also claims Netflix shared children’s personal data without the consent required under Florida law.
What Florida Is Asking For
Uthmeier is asking the court to permanently block the alleged practices, require Netflix to delete data deceptively collected from Florida users, stop using historical subscriber data to support its advertising business, and purge behavioral data gathered through Kids Profiles.
The state also wants the court to ban the use of alleged dark-pattern design features and impose civil penalties under Florida law.
Netflix pushed back firmly. The company said it takes member privacy seriously, complies with data protection laws, and has safeguards in place for children. Netflix called the lawsuit meritless and said it intends to defend itself in court.
This lawsuit follows a similar case in Texas, where Netflix also faces privacy-related accusations. The Florida case adds fresh regulatory pressure as Netflix continues to grow its advertising business.
According to TipRanks data, NFLX carries a Strong Buy consensus from 33 analyst ratings over the past three months. The average price target stands at $95.46, implying roughly 26% upside from Wednesday’s close.
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