WP Engine Alleges Automattic Planned Royalty Push on 10 Hosts in Escalating Legal Fight
Amended complaint claims 8% fee was arbitrary, cites pressure on Stripe and aggressive internal language
WP Engine has intensified its legal battle with Matt Mullenweg and Automattic, alleging the WordPress.com parent planned to demand royalty payments from 10 hosting competitors and pressured Stripe to sever ties with WP Engine.
The claims appear in WP Engine’s third amended complaint, filed after discovery unearthed previously sealed materials.
The 8% Royalty Dispute
At the core of the case is Mullenweg’s contention that WP Engine profits from the open-source WordPress project without contributing sufficiently to its ecosystem.
He demanded 8% of WP Engine’s monthly gross revenues as a royalty for use of the WordPress trademark.
WP Engine challenges that figure as arbitrary.
- It cites Mullenweg’s remarks at TechCrunch Disrupt 2024, where he said the rate followed a “business analysis.”
- He estimated the fee would total about $32 million, leaving WP Engine free cash-flow positive.
- WP Engine claims the rate reflected what Mullenweg believed the company “could afford to pay.”
Automattic disputes that narrative.
“There is nothing new here,” the company said in a statement, adding that courts have already dismissed several of WP Engine’s central claims.
Broader Royalty Strategy Alleged
One of the most striking new allegations: Automattic allegedly planned to pursue similar royalty claims against 10 other hosting companies.
The complaint references internal emails suggesting discussions with multiple providers. It names Newfold, whose portfolio includes Bluehost and HostGator, as already paying Automattic for trademark use. Other names remain redacted.
If accurate, the move would signal a broader monetization strategy around the WordPress trademark, not a one-off dispute.
Stripe and “Nuclear War” Rhetoric
WP Engine also alleges that Mullenweg contacted a Stripe executive, urging the payments company to cancel WP Engine’s contract. The outreach allegedly occurred after WP Engine filed its lawsuit in October 2024.
The filing further cites aggressive internal language attributed to Mullenweg, including references to giving WP Engine “the stick” if it refused the “carrot,” and describing his approach as “nuclear war.”
Automattic frames the case as robust competition.
WP Engine, by contrast, accuses Automattic of defamation and abuse of power, while Automattic counters that WP Engine has misused the WordPress trademark and engaged in deceptive marketing.
What’s at Stake
WordPress powers a substantial share of the web, and its open-source foundation has long blurred the line between community governance and commercial control.
The dispute raises a fundamental question: who gets to monetize an open ecosystem built on shared code but protected trademarks?
For hosting providers, the outcome could redefine how WordPress branding is licensed. For the broader open-source world, it tests how far trademark enforcement can go before it looks like toll collection.
The courtroom, not the codebase, will decide the next commit.
TL;DR:
WP Engine’s amended lawsuit alleges Automattic planned to demand 8% royalty fees from 10 hosting competitors and pressured Stripe to cut ties. Automattic denies new claims, calling the case repetitive and meritless. The dispute centers on monetizing the WordPress trademark.
AI summary:
- WP Engine files third amended complaint.
- Alleges 8% royalty demand and broader host targeting.
- Claims Automattic pressured Stripe.
- Automattic denies allegations.
- Case tests limits of WordPress trademark control.
