Popular language-learning app Duolingo is dealing with a class-action lawsuit accusing its executives of conserving traders in the darkish about monetization and AI efforts that drove away prospects.
Investors who acquired Duolingo shares between May 2, 2025, and Feb. 26, 2026, are eligible to file as claimants in the securities fraud lawsuit, which was filed earlier this month by Levi & Korsinsky, LLP, in US District Court for the Western District of Pennsylvania.
The swimsuit alleges Duolingo executives relentlessly marketed paid subscription tiers to customers on the free model of the app and carried out low-quality AI options that they knew would frustrate prospects, even as they informed traders they were prioritizing person growth.
Duolingo traders are eligible to file as claimants in the class-action lawsuit. dennizn – stock.adobe.com
“With increasing frequency, the Company forced free users to watch unskippable ads after each lesson, plus additional monetization for [paid tiers] Super and Max, creating scenarios where free users were spending as much or more time on watching ads than lessons,” the swimsuit said.
“The Company’s ad push was so aggressive that it saw users snap years-long participation streaks just to avoid being bombarded with the Company’s aggressive ad campaigns and monetization push.”
The lawsuit also alleged that unbeknownst to traders, in another effort to increase monetization, Duolingo rolled out a new characteristic called Energy to exchange its previous Hearts system.
With the previous Hearts system, free customers lost one coronary heart for every improper reply, and when their hearts ran out on a given day, they had to wait for them to replenish before finishing a new lesson. It allowed prospects to use Duolingo — once recognized for its inexperienced owl mascot — for prolonged durations of time without paying.
The Energy system, however, causes customers to lose vitality with every appropriate and incorrect reply – which means even if they full a flawless lesson, they are still utilizing vitality. Some vitality can be replenished by watching even more adverts, but for full vitality, prospects need to wait until the next day or signal up for a premium tier.
“The Company’s real, undisclosed goal was to create friction for free users to try and force them into becoming paid subscribers,” the lawsuit said.
Meanwhile, executives were telling traders that they were doing everything they could to keep away from frustrations and prioritize Daily Active User growth charges, or DAU, the swimsuit claimed.
The lawsuit accuses Duolingo executives of deceptive traders. Tada Images – stock.adobe.com
In an interview just forward of the class period, Duolingo CEO Luis von Ahn said the company’s main focus is to increase person engagement, and that if customers encounter “things that are frustrating, [that] frustration makes [users] leave,” according to the lawsuit.
He said Duolingo would “actually just smooth” out any sources of frustration, because executives understood “the tiniest frustration” would pressure customers to go away and Duolingo “just can’t lose those users.”
Von Ahn added that DAU growth is “probably the most important metric in the company” and one that executives would be “looking at … a lot.”
He also assured traders that Duolingo was utilizing AI options to improve person high quality and classes rather than focusing on cost-optimization.
The lawsuit, however, accused the company of pushing out “low-quality AI content” that irritated customers.
Duolingo was based in 2011 at Carnegie Mellon University in Pittsburgh, Penn., by von Ahn, then a professor in the pc science division, and a grad scholar of his.
The lawsuit accuses company executives of prioritizing monetization efforts over person growth. heerim studio – stock.adobe.com
It makes use of video games and characters to educate customers over 40 languages and a few other topics, including math and chess.
The primary model of the app is free for all customers. It also provides paid subscription tiers with perks. Exact costs fluctuate by nation.
Super Duolingo prices about $12.99 a month or $84 at an annual low cost, and provides customers no adverts and limitless vitality.
Duolingo Max – the most premium tier – prices about $30 a month or $168 at an annual low cost. It has all the advantages of Super Duolingo, along with access to AI instruments that enable prospects to function play conversations on video chats with Duolingo’s AI bot, Lily.
The lawsuit alleged that free “Duolingo users were inundated with ads at levels not seen before, and even paying Super subscribers were aggressively upsold and pushed to sign up for Max through consistent advertising and promotion, despite already paying to not see ads.”
Despite executives assuring traders that they were prioritizing person growth, Duolingo reported DAU growth of just 36% in November 2025 – a drop from earlier quarters, the lawsuit said. The information despatched the stock price down 25%.
This January, Duolingo announced its chief financial officer, Matthew Skaruppa, had resigned and also revealed preliminary DAU growth of 30%, sending the stock down another 8.5%.
In February, disclosing its fourth-quarter 2025 outcomes, Duolingo confirmed its DAU growth fee was slowing and forecast that its strategy shift would proceed to harm person growth, income and earnings all through 2026. The stock price fell another 14%.
So far this 12 months, Duolingo is down more than 20%. The stock was last trading at roughly $138.60 a share.
Duolingo did not immediately reply to The Post’s request for remark.