380,000 Hungarian users may be affected by proceedings against major language learning app

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The Hungarian Competition Authority (GVH) has launched competition proceedings against the American company Duolingo. The GVH suspects that the language learning service provider's commercial practices are unfair for several reasons, including misleading consumers about the effectiveness of its method and making unfounded claims about its market dominance. Furthermore, the company presumably uses unsolicited and frequent direct marketing messages to put psychological pressure on consumers and encourage them to use its services and switch to the paid version. It also fails to provide adequate information about the terms and conditions of use of its services, particularly the restrictions on free use.
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Duolingo is a United States-based online language learning service provider, available on the web and via a mobile app. Its language learning services are extremely popular,

with around 380,000 daily active users in Hungary alone.

The mascot and logo of the service is an owl named Duo.

The competition watchdog found that

  • the company did not make information about the terms of use and operation of its web and mobile application interfaces easily accessible to Hungarian consumers;
  • the company's slogan, 'Duolingo – the world's best way to learn a language', is likely an unfounded claim of market dominance.
  •  
  • the company is making potentially misleading claims about the results that can be expected from its online language learning service. Examples of these claims include the statement that

    9 out of 10 learners feel more confident speaking after 1 month of Duolingo!

  • the company provides consumers with vague, misleading or out-of-date information regarding the limitations of its free service, such as the number of lessons that can be completed in a day;
  • the company sends

    unwanted direct marketing messages to consumers,

    disturbing them in order to encourage them to use its services more frequently and regularly, as well as to subscribe to the paid version.

The Competition Authority suspects that Duolingo's above practices may be misleading consumers and encouraging them to make transactional decisions that they would not otherwise make.

They emphasise that the initiation of competition supervision proceedings does not imply that the company has committed an infringement. The purpose of the proceedings is to clarify the facts and prove the alleged infringement. The time limit for conducting the proceedings is three months, which may be extended twice, each time by a maximum of two months if justified. The GVH draws attention to the fact that, under competition law, the period between requesting the client to provide the necessary information to clarify the facts and them fulfilling that request is not included in the administrative deadline.

 

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