Duolingo faces class-action suit over aggressive ads, AI changes and slowed user growth
Duolingo has been hit with a securities-fraud class action accusing it of misleading investors about its ad pressure, AI rollout and weakening daily active user numbers.
Investors who purchased Duolingo shares between May 2 2025 and Feb 26 2026 are identified as potential claimants in a securities-fraud class action brought by Levi & Korsinsky, LLP in the US District Court for the Western District of Pennsylvania. The filing asserts that Duolingo’s leadership concealed an aggressive monetisation strategy—unskippable ads after each lesson and a new "Energy" mechanic that depletes on every answer—to coerce free users into paid subscriptions such as Super and Max.
It also alleges executives assured investors the firm was focused on Daily Active User growth, even as DAU rose only 36% in November 2025 and then slowed, triggering a 25% plunge in the stock. CEO Luis von Ahn is quoted as saying even minor frustration drives users away, yet the lawsuit says the company knowingly released low-quality AI content that irritated learners. Recent disclosures of CFO Matthew Skaruppa’s resignation and continued DAU slowdown have contributed to a cumulative share decline of over 20% this year.
Why it matters
The lawsuit could force tech firms to be more transparent about monetisation tactics and AI risks to shareholders.
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