WP Engine Claims Automattic Planned Royalty Fees for 10 Hosting Competitors, Tried to Kill Its Stripe Contract

The Automattic vs. WP Engine saga has a significant new chapter. In a third amended complaint filed in February 2026, WP Engine unveiled previously sealed evidence alleging that Matt Mullenweg didn’t just target WP Engine — he planned to demand royalty payments from at least 10 hosting companies for using the WordPress trademark.

What Happened

The amended complaint — now with unredacted allegations gained through the discovery process — paints a broader picture of Automattic’s strategy. According to WP Engine, Mullenweg identified at least ten competitors for similar trademark licensing demands, with WP Engine serving as the public-facing example. The original demand: 8% of monthly gross revenues, which Mullenweg estimated would amount to roughly $32 million from WP Engine alone.

Internal documents cited in the filing reveal what WP Engine describes as a “carrot or stick” approach: cooperate and pay, or face consequences. The complaint alleges that defendants acknowledged the ability to “destroy all competition” and would “steal every single WP site” from non-compliant hosts. Despite publicly denying aggressive rhetoric, the filing includes documents where Mullenweg wrote that unresolved disputes would “look like all-out nuclear war.”

The complaint also introduces a new allegation: in mid-October 2024, Mullenweg allegedly emailed a Stripe executive requesting the company cancel its contracts and partnerships with WP Engine, threatening that Automattic would exit its own Stripe agreements if Stripe refused. Additionally, WP Engine claims that Newfold Digital (parent company of Bluehost and HostGator) is already paying Automattic “exorbitant sums” under existing trademark arrangements.

Why It Matters

This case cuts to the heart of who controls WordPress. If Automattic can demand royalties from hosting companies that use the WordPress name, it fundamentally changes the economics of WordPress hosting. Every managed WordPress host — from small boutique agencies to major players — would need to factor trademark licensing costs into their pricing.

The Stripe allegation is particularly alarming. If a software project’s leadership can pressure payment processors to cut off competitors, it introduces a chilling effect that goes well beyond trademark disputes. Payment processing is critical infrastructure for any online business.

For the broader WordPress community, the unredacted evidence suggests the original WP Engine conflict wasn’t an isolated dispute but potentially the first move in a wider licensing strategy. Whether the courts agree with WP Engine’s characterization remains to be seen — these are allegations, not findings.

What You Should Do

Site owners: Don’t panic. Your WordPress site isn’t affected by this lawsuit, and WordPress itself remains free, open-source software under the GPL. The dispute is about the trademark, not the software.

Hosting providers: Watch this case closely. If Automattic’s trademark licensing approach is upheld, it could set a precedent for how open-source trademarks are monetized across the industry.

Everyone: The case is in active litigation with no settlement. The trial timeline hasn’t been publicly confirmed, but discovery is ongoing. We’ll cover major developments as they happen.

Sources

• Automattic Planned to Target 10 Competitors with Royalty Fees — TechCrunch
• WP Engine Complaint Adds Unredacted Allegations — Search Engine Journal
• WP Engine-Automattic Feud Resurfaces with New Claims — Yahoo Finance