The well-known language-learning platform, Duolingo, is currently facing a class-action lawsuit. The complaint alleges that the company’s executives misled investors regarding their monetization strategies and artificial intelligence initiatives, which reportedly alienated some users.
Those who purchased Duolingo shares between May 2, 2025, and February 26, 2026, are qualified to join the lawsuit initiated by Levi & Korsinsky, LLP in the US District Court for the Western District of Pennsylvania.
The lawsuit claims that Duolingo’s management persistently promoted paid subscription options to users of the free app while introducing subpar AI features, which they were aware would likely frustrate users. Meanwhile, they communicated to investors that user growth was a top priority.
According to the legal filing, the company increasingly compelled free users to watch unskippable ads after each lesson. Additionally, users on the free tier spent more time viewing ads than engaging in lessons, particularly evident with the aggressive monetization strategies applied to the Super and Max subscription tiers.
The suit further contends that unbeknownst to investors, Duolingo introduced a new feature named Energy—intended to replace the previous Hearts system—to enhance monetization efforts.
Under the old Hearts system, free users would lose a heart for every incorrect answer and had to wait for hearts to restore before continuing lessons. This allowed users to engage with Duolingo for extended periods without payment. In contrast, the Energy system drains energy for both correct and incorrect answers, requiring users to either wait for a full recharge or watch more ads, or upgrade to a premium service.
The lawsuit argues that the company’s true, undisclosed goal was to create obstacles for free users, thereby nudging them toward paid memberships. Despite this, executives reportedly assured investors that all efforts were being made to minimize user frustrations and to focus on increasing Daily Active User (DAU) numbers.
In a pre-class period interview, CEO Luis von Ahn emphasized that enhancing user engagement was paramount. He indicated that any frustrations users experience could lead them to leave, something Duolingo must avoid at all costs.
Von Ahn mentioned that DAU growth was critical for the company, a point executives supposedly monitored closely. He also insisted that AI advancements were aimed at improving user experience rather than merely cutting costs.
However, the lawsuit challenges this assertion, alleging that poor-quality AI content was being pushed onto users, leading to dissatisfaction.
Duolingo began in 2011 at Carnegie Mellon University in Pittsburgh, founded by von Ahn and one of his graduate students. The app employs games and various characters to teach over 40 languages along with subjects like math and chess. While the basic version remains free, there are also options for paid subscriptions with additional features, varying in price by location.
Specifically, Super Duolingo is around $12.99 a month or $84 annually and comes with no ads and unlimited energy. The premium tier, known as Duolingo Max, costs about $30 monthly or $168 per year, offering all Super benefits along with access to AI-driven role-play conversations.
The lawsuit claims that free users have encountered an unprecedented amount of ads, and even paid Super subscribers received constant upsell promotions to upgrade to Max, all despite already opting to pay for an ad-free experience.
Even while executives highlighted a focus on growing the user base, Duolingo experienced only a 36% increase in DAU in November 2025, a noticeable decline compared to earlier quarters, causing a 25% drop in their stock price.
This January, the company announced the resignation of its chief financial officer, Matthew Skaruppa, alongside a preliminary DAU growth figure of only 30%, which led to an additional 8.5% decline in stock price.
Later, in February, Duolingo reported its fourth-quarter 2025 results, revealing a slowdown in DAU growth and predicting the ongoing strategic shift would negatively impact user growth, revenue, and profits throughout 2026. This announcement triggered another 14% fall in stock price.
So far in 2026, Duolingo’s stock has decreased by over 20%, trading recently at approximately $138.60 per share.
There has been no immediate response from Duolingo regarding these developments.
