‘Bleed us dry’: Why tech platforms are facing rebellions

When Jak found the online marketplace Etsy, it seemed like the perfect match: a technology platform for small business owners to sell handmade items that promised to be a creative outlet and turn a net profit.

Five years later, Jak is one of thousands in open rebellion against the place they once considered a safe haven – part of a growing trend of users rising up against tech platforms.

“We were attracted by the ‘shop small’ slogans, the low fees and the useful marketplace, and then once everyone built their stores they started to tighten their grip and bleed us dry,” said said the 30-something, who runs an online store from Glasgow in Scotland and asked that his surname not be used.

New York-based Etsy, which makes sales of $5 billion a year from around 5 million sellers and 90 million buyers, has sparked fury for raising the fees it charges its little ones tradespeople.

More than 10,000 of its vendors closed their stores for a week from April 11, going on strike.

It came weeks after users of video-sharing platform Vimeo expressed outrage over a similar price hike, and users of social media platform OnlyFans forced owners to drop a proposal to ban explicit content.

Amazon has had countless battles with its sellers – a recent survey in Germany found nearly 80% were unhappy with their relationship with the e-commerce giant.

Josh Silverman, CEO of Etsy | BLOOMBERG

And Uber faces frequent unrest – Indian drivers are currently refusing to turn on the air conditioning in protest at soaring fuel prices and low fares.

“We are now entering a time of revolt and rebellion,” said Vili Lehdonvirta, a professor at Oxford University who discusses the power of technology platforms in an upcoming book “Cloud Empires”.

Although he believes that many of these rebellions have a limited chance of short-term success, long-term prospects are not a foregone conclusion.

“Etsy is scamming us”

The breaking point for Etsy sellers was a letter from the firm announcing that the platform would take a 6.5% cut on every sale instead of 5%.

The rationale, according to the company, was to invest in marketing and attract more buyers.

Kristi Cassidy, who sells Rhode Island Gothic-style suits and wedding dresses in the United States, led the campaign to revamp the new policy.

“Rather than reward sellers whose hard work has helped Etsy become one of the most profitable technology companies in the world, Etsy is ripping us off, ignoring us, and patronizing us,” she wrote in a petition. line which now has more than 80,000 signatures.

Sellers around the world rallied to his call, and complaints began flooding social media.

“I live in constant fear of having a stash on my account,” Jak said.

Etsy may withhold or “reserve” a percentage of a seller’s revenue for up to 90 days if it suspects the sales are not legitimate.

“They can apparently do it for any reason,” Jak said.

Other sellers have accused the platform of allowing the market to be flooded with sweatshop-produced tattoos or imposing an onerous surveillance system.

The OnlyFans site in June 2021. Users of the OnlyFans social media platform forced the owners to drop a proposal to ban explicit content.  |  BLOOMBERG
The OnlyFans site in June 2021. Users of the OnlyFans social media platform forced the owners to drop a proposal to ban explicit content. | BLOOMBERG

Etsy boss Josh Silverman recently told the Wall Street Journal that the company always listens to its sellers and only makes changes for their benefit.

“When we look at our fees compared to other platforms…we think it’s a very fair exchange of value,” he said.

“Boil a Frog”

Lehdonvirta has seen this pattern before, especially with Amazon and eBay.

Technology platforms create walled gardens where buyers and sellers are protected from cybercriminals and fraudsters, and quality standards are guaranteed.

They then become too dominant.

“We find ourselves in a situation where they are the de facto rulers of e-commerce and now they are starting to turn against their people – like all the autocrats in history,” he said.

Labor market specialist Werner Eichhorst of German think tank IZA said tech companies like Etsy, Uber and food delivery companies operated “highly ambiguous” systems that allowed “complete ownership and oversight power over their clients”.

But he said Etsy’s investors seemed much more interested in profitability than sellers’ well-being, so he wouldn’t be surprised if the platform raised its fees further.

The two analysts, however, said those who depend on the platforms for their livelihoods could emerge victorious by banding together in cooperatives or creating different platforms.

“They can get away with slowly boiling a frog, but if there’s a perceived transgression of norms, something is done that’s so egregious, then people stand up,” Lehdonvirta said, suggesting that Etsy was at that time.

Eichhorst also hit on a dark animal metaphor: “You can’t milk cows and kill them at the same time.”

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