Automattic Demands 8% of WP Engine’s Revenue: The Heated WordPress Battle Explained

In a dramatic twist involving two giants in the WordPress ecosystem, Automattic, the company behind WordPress.com, demanded that WP Engine, a prominent WordPress hosting provider, hand over 8% of its monthly revenue. The request has ignited a public dispute over trademarks, community contributions, and the ethics of monetizing open-source software.

On September 20th, Automattic proposed a seven-year deal that would allow WP Engine to continue using the WordPress trademark in exchange for either a revenue cut or employee resources dedicated to the WordPress.org open-source project. However, WP Engine rejected the offer, leading to a deepening conflict between the two companies.

Automattic’s Demands: A Royalty or Community Contribution

Automattic’s proposed deal offered WP Engine two options. First, WP Engine could agree to pay an 8% royalty from its revenue to Automattic. Alternatively, it could dedicate 8% of its workforce to directly contributing to the WordPress.org open-source project, a gesture aimed at reinforcing WP Engine’s commitment to the platform’s future.

This employee contribution option would give WordPress.org and Automattic "full audit rights" to WP Engine’s employee records and time-tracking systems, allowing Automattic to ensure that the company was honoring the terms of the agreement. The deal also included a restriction on forking or modifying Automattic’s software, including popular extensions like WooCommerce.

If WP Engine chose the royalty payment, Automattic promised to publicly acknowledge WP Engine’s financial support for WordPress through its Five for the Future initiative—a program that encourages companies to allocate 5% of their resources to open-source contributions. The goal was to help the community understand WP Engine’s long-term commitment to the platform.

WP Engine’s Rejection and Automattic’s Response

Despite the offer, WP Engine rejected Automattic’s proposal, arguing that its use of the WordPress trademark and the “WP” abbreviation falls under fair use guidelines. Following this rejection, Automattic publicly accused WP Engine of “deception and incompetence,” scrapping the initial offer and intensifying the battle.

Automattic has since taken drastic steps. During his keynote at the WordCamp conference on September 20th, Matt Mullenweg, CEO of Automattic and lead developer of WordPress.org, accused WP Engine of failing to contribute enough to the WordPress community. He also hinted at legal action unless WP Engine stopped using WordPress branding and trademarks without adequate contributions back to the community.

In response, WP Engine filed a cease and desist order against Automattic, claiming that Mullenweg harassed its board members and CEO through “text messages and calls” leading up to the WordCamp event. However, Automattic dismissed these claims, calling them “one of the many lies” and defending its stance as a reasonable request for a verbal agreement to reinvest revenue back into WordPress.

The Fallout: WordPress.org Bans WP Engine

The conflict escalated further on October 1st when WordPress.org—the open-source arm of WordPress, also led by Mullenweg—banned WP Engine from its servers, cutting off access to WordPress updates and plugins for WP Engine customers. WP Engine, however, swiftly responded by implementing its own workaround, ensuring that its customers could continue using the hosting service without disruption.

A Battle Over Trademarks, Not Open-Source Code

While some might view this conflict as a battle over open-source software, Automattic has made it clear that the core issue is over the use of trademarks. Automattic spokesperson Megan Fox clarified, “The WPE [WP Engine] issue is over trademarks, not the use of the open source software.” Despite this clarification, the lines between trademark usage and contributions to the open-source project remain blurry in the public debate.

The Bigger Picture: The Business of Open-Source

At its heart, this clash between Automattic and WP Engine highlights the complex dynamics that come into play when businesses are built on open-source projects. On one hand, open-source software thrives on community contributions and free usage. On the other hand, businesses profiting from open-source projects like WordPress must navigate the fine line between commercial interests and community-driven development.

For WP Engine, the conflict raises questions about fair use and the ethical obligations of companies that rely heavily on open-source platforms. For Automattic, it’s about ensuring that companies benefiting from WordPress contribute their fair share to its long-term success.

What’s Next for Automattic and WP Engine?

The ongoing dispute between Automattic and WP Engine has yet to see a clear resolution. As of now, the battle has tarnished both companies' reputations within the WordPress community. However, as WP Engine continues to operate independently of WordPress.org’s plugin and update infrastructure, it remains to be seen how the conflict will impact their business in the long run.

For now, the WordPress ecosystem watches closely as two of its major players engage in a public struggle over trademarks, revenue sharing, and the future of open-source collaboration.

Key Takeaways:

• Automattic demanded an 8% revenue share or equivalent employee contribution from WP Engine for the right to use the WordPress trademark.

• WP Engine rejected the proposal, leading to a heated public conflict and accusations of deception and harassment.

• On October 1st, WordPress.org banned WP Engine from its servers, cutting off access to updates and plugins.

• The battle underscores the challenges of balancing commercial interests with community contributions in the open-source software world.