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

Web hosting company WP Engine has filed an amended complaint that includes controversial new allegations in its ongoing legal battle with WordPress co-founder Matt Mullenweg and his company Automattic (parent company of WordPress.com). The company now claims that Mullenweg intended to target 10 different hosting companies with royalty payments for their use of the WordPress brand and tried to convince payment processor Stripe to cancel its contract with WP Engine.

At the heart of the dispute, Mullenweg believes that WP Engine is profiting from the open source WordPress project without contributing to the community, and has demanded that the hosting company pay 8% of its gross monthly revenue in royalties for use of the WordPress brand.

The lawsuit, originally filed by WP Engine in October 2024, accuses Automattic and Mullenweg of defamation and abuse of power. Automattic filed counterclaims last year, alleging that the hosting company was abusing the WordPress trademark and engaging in deceptive marketing practices.

In this latest filing, WP Engine amended its complaint for a third time after accessing information disclosed during the discovery process. The information, which is not now redacted, was previously closed at Automattic’s request.

Notably, one of the new claims accuses Automattic of allegedly planning to target 10 other competitors with royalty claims similar to those targeting WP Engine.

The complaint also states that Newfold, a company whose portfolio includes hosting providers like Bluehost and HostGator, among others, already pays Automattic for use of its trademarks and that Automattic is in talks with others. (The names of the other hosts were redacted in the complaint, which cited email conversations between those companies and Mullenweg.)

WP Engine also alleges that Mullenweg reached out to a Stripe executive via email to pressure the company to cancel WP Engine’s contract. This happened after WP Engine filed a lawsuit against Automattic, the complaint states.

The filing also challenges the 8% rate for royalty payments as somewhat arbitrary. Going back to Mullenweg’s comments at TechCrunch Disrupt 2024, WP Engine claims that the Automattic founder mainly came up with the price because he thought WP Engine “could pay it.”

At Disrupt, Mullenweg responded to a question about how the 8% fee was settled by saying it was based on “business analysis.”

“If you estimate that would be around $32 million, it would still be free cash flow positive, and based on our estimates and negotiations over the last 18 months, we felt that was a fair amount,” he said at the event.

Other new allegations in the filing point to aggressive language Mullenweg allegedly used against WP Engine, such as threats that if the web hosting provider didn’t comply, it would start stealing its customers. For example, “If they don’t take the carrot, we’ll give them the stick.”

The complaint also includes allegations that Mullenweg used the term “nuclear war” to describe his approach to challenging WP Engine.

Automattic did not respond to a request for comment as of press time.