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“title”: “WP Engine Files Third Complaint Against Matt Mullenweg”,
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WP Engine recently filed its third amended complaint against WordPress co-founder Matt Mullenweg and Automattic. The filing includes newly unredacted allegations that Mullenweg identified ten companies to pursue for licensing fees. Additionally, the complaint alleges Mullenweg contacted a Stripe executive to persuade the payment platform to cancel contracts with WP Engine.

The Nuclear War Statement Dispute

The defendants previously argued that Mullenweg did not use the phrase “nuclear war.” However, recently produced documents show he used the phrase in a message describing his response if WP Engine did not comply with his demands. The footnote in the complaint states that during a recent hearing, defendants claimed the phrase appeared in quotes but was never actually stated by Mullenweg.

Documents recently produced by defendants confirm otherwise. In a September 13, 2024 message sent shortly before the campaign against WP Engine began, Mullenweg declared: “for example with WPE. [i]f that doesn’t resolve well it’ll look like all-out nuclear war.” WP Engine argues that both threats reflect wrongful conduct, regardless of exact wording.

Mullenweg’s Email to Stripe Executive

Another newly unredacted detail reveals an email from Matt Mullenweg to a Stripe executive. In the message, he reportedly asked Stripe to “cancel any contracts or partnerships with WP Engine.” Stripe operates as a financial infrastructure platform that enables companies to accept credit card payments online.

The third amended complaint states that in mid-October 2024, just days after WP Engine brought the lawsuit, Mullenweg emailed a Stripe senior executive. He allegedly insisted that Stripe cancel any business dealings with WP Engine and threatened: “[i]f you chose not to do so, we should exit our contracts.” The complaint characterizes this as an effort to inflict market harm on WP Engine.

Allegations of Power to Destroy Competition

In paragraphs 200 and 202, WP Engine alleges that defendants acknowledged having the power to “destroy all competition.” The complaint further asserts that defendants were seeking contributions that benefited Automattic rather than the WordPress.org community. WP Engine argues Mullenweg abused his roles as head of a nonprofit foundation, owner of critical infrastructure, and CEO of a for-profit competitor.

These paragraphs support WP Engine’s claim that the “Five for the Future” program and other community initiatives were used as leverage. The complaint asserts that only a monopolist could make such demands and successfully coerce competitors in this manner. Documents recently produced by defendants allegedly acknowledge they have the power to destroy all competition unless market participants capitulated to their demands.

Internal documents reveal the truth behind the community contribution rhetoric, according to the complaint. WP Engine alleges defendants engaged in an anticompetitive campaign to coerce competitors to “contribute to Automattic.” The complaint argues only a monopolist could make such demands and enforce compliance.

Free Services and Trademark Enforcement

Additional paragraphs allege that internal documents contradict defendants’ claims about legitimate trademark enforcement. The complaint states that defendants conceded internally that certain WordPress hosts were already receiving the same benefits for free. Specifically, defendants acknowledged that “any Tier 1 host (WPE for example)” would resist a trademark license because “they get the same thing today for free.”

The documents allegedly show defendants admitting these hosts “have never paid for [the WordPress] trademarks and won’t want to pay.” This contradicts their current position that trademark enforcement is necessary and legitimate. WP Engine uses this evidence to support its argument that the licensing demands were pretextual.

The Carrot and Stick Approach

Paragraphs 211, 214, and 215 cite internal correspondence that allegedly reflects an intention to enforce compliance using a “carrot” or “stick” approach. The complaint uses this language to support claims of market power and exclusionary conduct under the Sherman Act. Given their market power, defendants expected to enforce compliance through incentives or punishment.

Internal discussions reveal that if market participants did not accept price increases via a partnership with a trademark license component, “they are fair game.” Defendants would then start stealing their sites, effectively eliminating those competitors. Internal correspondence states: “if they don’t take the carrot we’ll give them the stick.”

The complaint describes how defendants categorized market participants into three groups. First, “friends” like Newfold who pay significant money and whose relationships defendants want to nurture. Second, “would-be friends” like WP Engine who are good citizens but don’t directly contribute to Automattic. Third, “charlatans” who don’t contribute and whose sites defendants should “steal.”

Plan to Target Ten Competitors

Paragraphs 218, 219, and 220 support WP Engine’s claim that it was the “public example” of a broader plan. The complaint alleges defendants planned to target at least ten other competitors with similar trademark-related demands. While WP Engine decided to fight by refusing the demands, the defendants’ list included numerous other competitors.

Based on recently produced discovery documents, other competitors such as Newfold and at least one redacted company are paying defendants significant sums. These payments are part of deals that include trademark use rights. In internal documents, one company confirmed that money from their hosting page was going directly to Mullenweg.

In return, Mullenweg claimed he “shield[ed]” this company “from directly competitive actions from a number of places.” He criticized the contribution levels for August 2024, stating he would need three years of such payments to afford a new recreational vehicle. When the company described itself as “the smallest fish” and asked if it was the only one being asked to change, Mullenweg responded “nope.”

On November 26, 2024, the same day the court held a preliminary injunction hearing, Mullenweg told the company its proposed monthly payment was not “going to work.” He wished it “best of luck” in resisting higher demands. The complaint argues these payments were not standardized but could be increased at defendants’ insistence.

What These Allegations Mean

Much of the previously redacted material supports WP Engine’s antitrust claims. The statements that defendants had the power to “destroy all competition” form a central part of the argument. WP Engine argues these documents show a pattern of using market power to extract payments from competitors.

The complaint characterizes the trademark licensing demands as part of a broader scheme. According to WP Engine, defendants used their control of WordPress infrastructure to pressure competitors into funding Automattic’s commercial interests. The allegations suggest this went beyond legitimate trademark protection into anticompetitive territory.

What happens next depends on how the court evaluates these newly unredacted materials. The case continues to develop as both sides present evidence supporting their positions. The judge will ultimately determine whether the allegations support WP Engine’s claims of monopolization and exclusionary conduct.

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Original Source: www.searchenginejournal.com