Automattic planned to target 10 competitors with royalty fees, WP Engine claims in new filing

Source: TechCrunch

Background

Web hosting company WP Engine has filed an amended complaint in its ongoing legal battle with WordPress co‑founder Matt Mullenweg and his company Automattic (the parent of WordPress.com). The dispute centers on Mullenweg’s claim that WP Engine is profiting from the open‑source WordPress project without contributing back to the community and his demand that the hosting company pay 8 % of its monthly gross revenues as a royalty fee for using the WordPress brand.

The suit was originally filed by WP Engine in October 2024 and accused Automattic and Mullenweg of defamation and abuse of power. Automattic responded with counterclaims alleging trademark abuse and deceptive marketing practices.

New Allegations

In the latest filing—WP Engine’s third amendment after discovery uncovered previously sealed information—the complaint adds several new claims:

• Targeting ten competitors: Automattic allegedly planned to pursue royalty payments from ten other hosting companies, similar to the demand placed on WP Engine.
• Royalty rate challenge: WP Engine argues the 8 % rate is arbitrary, noting that Mullenweg said the figure was based on a “business analysis” and what he thought WP Engine “could afford to pay.” He estimated the fee would amount to roughly $32 million, which would still leave WP Engine cash‑flow positive.
• Stripe pressure: The complaint alleges Mullenweg emailed a Stripe executive to pressure the payment processor into canceling WP Engine’s contract after WP Engine filed its lawsuit.
• Other hosts paying Automattic: The filing states that Newfold (owner of Bluehost, HostGator, etc.) is already paying Automattic for trademark use, and that Automattic is in conversations with additional hosts (names redacted).
• Aggressive language: Internal correspondence cited in the complaint includes threats such as “If they don’t take the carrot, we’ll give them the stick,” and references to “nuclear war” describing Mullenweg’s approach to WP Engine’s defiance.

Reactions

Automattic did not respond to a request for comment at the time of publication.