WP Engine revs Automattic lawsuit with antitrust claim

WP Engine, a hosting provider for websites running open source WordPress software, has revised its legal complaint against rival Automattic and its CEO Matthew Mullenweg to include antitrust allegations. "We have amended and expanded our initial complaint to include antitrust claims brought under laws designed to protect competition and consumers from the damage that an unchecked, dominant player can inflict, as well as other new claims arising from Mullenweg and Automattic’s continued pattern of misconduct," a spokesperson told The Register . "WP Engine is committed to supporting our customers, users and the WordPress community and looks forward to proving its case in court.

" WP Engine has already alleged that Automattic's conduct amounts to attempted extortion, libel, interference with contractual relations, computer fraud and abuse, and unfair competition, among others. The amended complaint [PDF] – which has grown from 62 to 144 pages – argues that efforts by Mullenweg and his org to force WP Engine to pay a fee to license the "WordPress" trademark violate antitrust laws. "While Defendants have continually made representations guaranteeing access to the WordPress open source software and community, they are now demanding 8 percent of WPE's revenues for a purported trademark license to refer to 'WordPress,' a use for which no license is needed," the revised legal filing [PDF] states.



The initial complaint [PDF] was filed on October 2, 2024, following WP Engine's refusal to pay a licensing fee sought by Automattic – a for-profit rival – to use the WordPress trademark. The trademark has since 2010 been owned by the WordPress Foundation (in which Mullenweg, co-creator of WordPress, participates as a board member) and licensed back for commercial purposes to Automattic (led by Mullenweg). Since February 2023, Automattic tried to convince WP Engine to pay a "royalty fee" – which in the more recently published term sheet is described either as 8 percent of WP Engine's gross revenue or an equivalent amount "in the form of salaries of WP Engine employees working on WordPress core features and functionality to be directed by WordPress.

org" ( owned by Mullenweg). Mullenweg's rationale for making that demand is that he believes WP Engine does not contribute enough value back to the open source WordPress project. The license under which WordPress is offered does not include a requirement for such contributions.

WP Engine declined to pay, thus Mullenweg in September began a campaign of public criticism of the business, and actions designed to pressure the rival hosting firm. This has involved denying access to themes and extensions hosted on WordPress.org, forking a WP Engine plugin, denying WP Engine access to WordPress conferences , and encouraging Automattic staff who don't agree with the campaign to leave .

Following WP Engine's initial complaint, Automattic's legal representative characterized the filing as " meritless ." And subsequently, the org's legal team filed to dismiss the complaint, to strike Mullenweg's personal statements from the litigation, and to oppose WP Engine's request for a preliminary injunction. A hearing on the preliminary injunction request is scheduled for November 26, 2024.

If granted, it could force Automattic to reverse some of its punitive measures – like denying WP Engine access to code hosted on WordPress.org. The revised complaint argues that the court should consider four relevant markets with regard to the antitrust claims: the Web Content Management Systems Market, the WordPress Web Hosting Services Market, the WordPress Custom Field Plugin Market, and the WordPress Plugin Distribution Market.

The filing also contains arguments that Automattic and Mullenweg dominate these markets in violation of the law – as demonstrated by their efforts to increase costs for WP Engine and to hinder WP Engine's ability to provide services to WordPress users. "Defendants are using their purported trademark rights to block WPE from the WordPress community as a means to extort monopolistic pricing," the amended complaint reads. "This conduct demonstrates Defendants' direct use of their trademarks to exclude competition and maintain a monopoly over the market, in violation of Section 2 of the Sherman Act, 15 U.

S.C. § 2.

" About 43 percent of websites are based on WordPress, according to WordPress.org . The amended complaint goes on to argue that the WordPress community has been duped into believing WordPress software is free and open when in fact Mullenweg and his commercial business have the power to deny access to WordPress.

org – which turns out to be a critical chokepoint. "Defendants indisputably knew that Mullenweg personally owned WordPress.org, and that Automattic had been given an exclusive license and that the transfer to the [WordPress] Foundation was illusory, and that the ownership of WordPress.

org and the exclusive license created a conflict of interest," the amended complaint states. "Defendants also knew that contrary to their promises that WordPress would be 'free' and 'open' 'to the world' forever, Defendants could, at any time, begin making extortionate demands for ransom payments and ban anyone they unilaterally deemed to be a competitive threat." A spokesperson for Automattic had this to say in response to the filing: WP Engine is at it once again.

They have filed yet another complaint to try to disparage Automattic and our CEO Matt Mullenweg. Automattic and Matt are confident in our legal position and will vigorously litigate against this baseless filing, as well as pursue all remedies against WP Engine and Silver Lake. WP Engine exploits the generosity of the WordPress community and infringes on the WordPress trademark.

To be clear, WP Engine is not entitled, either legally or morally, to have unfettered access to WordPress.org – a website Matt Mullenweg built and maintains for the benefit of a robust community. WP Engine can and always has been able to access the WordPress software and plugins available on WordPress.

org, as can anyone. WP Engine has put profits ahead of the WordPress community and has expected to continue benefiting, for free, from the tireless contributions of Matt, Automattic, and the WordPress community. WP Engine and Silver Lake should not expect to profit off the back of others without carrying some of the weight.

That is all Matt is asking. ®.