Etsy Class Lawsuit
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3889
Etsy shut down your account for no reason? Join the Collective lawsuit.
If you’re reading this, you probably are in a situation where Etsy shut down your store for no reason or explanation, killing months/years of hard work and dedication.
We are in the same situation and have decided to take action against the platform's unfair practices.
Out of nowhere, Etsy suspended our store fifteen months later without explanation.
To them, the process of suspending an account doesn’t mean anything, and I assume that not a single person has looked into it, but on the other side of their “No communication” system with merchants, individuals are pouring their hearts out into achieving the most minor amounts of success on the platform.
Individuals who have invested their life savings into growing these accounts hoping to become successful merchants. Individuals are creating dedicated email addresses, Slack channels, Discount codes, and
Youtube channels only for the Etsy platform, all while getting screwed over again and again by their actions.
We know that we haven’t done anything wrong, and many reasons could have triggered a “suspension” alert: They might be trying out a new AI tool to automate suspensions, or A competitor might have decided to report our listings. Or maybe they just decided that our products didn’t fit the marketplace anymore?
Regardless, suspending an account and sending an automated message is inhumane and reckless.
I would understand if they suddenly decided to become super selective and focus only on specific niche sellers! In this case, they should change their sign-up process and require merchants to go through a robust process of providing information on their business, other online presence, production and supply, etc... But I am guessing this probably isn’t as easy as letting everyone sign up, allowing merchants to put everything they have into growing a store and then dropping them out of nowhere.
I believe in capitalism, and any successful society needs a good balance of capitalist and socialist elements. Another key to a successful society is applying equal common law, a core concept of the US system that allows Etsy to operate. I am usually not the first to suggest regulation for corporations as I believe they work on sound fait principles, to begin with, but Etsy doesn’t, and it’s all too easy for them.
They operate the platform like a reckless authoritarian regime, not talking to merchants or considering their actions; it’s all about “Let’s focus on what will make consumers spend more money on Etsy,” its merchants are just a by-product. I mean, why should they care about them? They have enough sign-ups coming in every day!
Imagine if the US government decided to go around and “suspend” businesses without any reason or explanation: small companies that put their life savings into their operations like hair salons, restaurants, and coffee shops after they had all been paying 20-30% of their revenue to the government.
This is precisely what Etsy is doing. It’s criminal and should be regulated.
Can Etsy do this?
Before we get into the legal aspects of Etsy’s actions, let's take a look into Etsy’s relation history with its merchants as well as consider the general “Fairness” of their actions:
What is Etsy?
Etsy is a marketplace for “Handcrafted and Artisan goods.” The service they provide allows merchants to sell on their high-traffic websites. Here are the key points:
Collectively against Etsy
Etsy’s “Forced Arbitration”
You might not be aware of it, but Etsy’s terms of use contain a clause stating that merchants agree not to sue or build a case against Etsy, no matter what they do.
More precisely, Users and Etsy agree not to bring claims against each other on a collective basis. But instead, through individual arbitration. And that both agree not to sue each other in court.
This clause only benefits Etsy and puts merchants at an extreme disadvantage. Here is a bullet point of what this means:
In other words, Etsy says they can do whatever they want, and you can never sue us.
Why Arbitration?
Mandatory arbitration agreements discourage class actions and make individuals go through arbitration separately. So, if a company screws over a bunch of consumers, it doesn't have to worry about a big lawsuit. Instead, customers have to handle their complaints individually in arbitration, which most of them won't do due to the lack of time and resources.
What now?
Mandatory arbitration is commonly added in terms of service by big tech companies, which they claim is because it's faster and cheaper for both parties; however, the real reason is that they don't care if an individual goes against them as they are prepared for such minor cases, but they are worried about class action lawsuits as they are much harder to win when many people hold the same case, and they are costly to defend.
In many cases, especially with big tech companies like Etsy, Courts have often considered the arbitration clauses invalid as they have found them immoral, unfair, and against public policy. Additionally, merchants have no bargaining power, which makes it unfair.
In Addition to their forced arbitration clause being potentially invalid for unfairness, other factors can invalidate the clause:
You signed up before July 24th 2023
Etsy added this clause to their terms of use on July 24th. I triple-checked all our emails, and they have not notified us of a change in terms.
Even if they did, they should have written the arbitration statement in the subject line with clear instructions on what it meant in the email body. The terms wouldn’t apply to you without adequate notification of the change. If you did receive an email or notification from Etsy, please include this with a screenshot in the form submission.
Total sign ups: 3889
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