Free stock sites are the reason why sales has been down-going, the last couple of years. What can be done about it?

They could be one reason, they're not the only reason.
Nothing can be done about it, unless they're selling files illegally (i.e. stealing).

I think it's a major reason...i have seen several of the big sites list advantages between themselves and free stock sites.  Yes, Shutterstock don't have the quality check they used to, but sales has been down on each of the sites i use and it's a lot. Check my list here http://polarpx.com/microstock-sites/

Your sales being down does not automatically translate into the agencies sales being down.

Free stock sites are the reason why sales has been down-going, the last couple of years. What can be done about it?

I don't know how you could know that this is the case, but I think it's not.

The free sites in one form or another have been around as long as microstock has been and they didn't stop the huge rise in sales that we saw then. For the most part, there is a very small and limited selection of free stuff, and as long as it's very obvious that you get something different when you license an image for money, the free content just fills a need (for schools and very low-budget non-profits, etc.)

Some agencies (such as Dreamstime) have seen business fall (and they're suing Google who they see as a major factor in that), but SS has been reporting rising revenues, not decreasing

There are some much more likely candidates for why certain groups of contributors are seeing stagnant or falling sales - massive growth of image libraries (even if half the content is unsaleable rubbish) and all sorts of price decreases (all supposed to boost our income, but are clearly just trying to grab share from other agencies by undercutting on price).

You're barking up the wrong tree

Most of the photos hosted by the free stock sites are shot by the cheaper cameras, like the APS-C and/or the older, entry-level level ones:

https://pixabay.com/en/cameras/ [nofollow]

I have a co-worker who contributed a small amount (less than 50) of photos on pixabay, and he shoots with an old D5100. He gets a few dollars a month from people who download his photos, he is not for the $, mainly just for the fun & enjoyment. I guess that's why others are contributing to the free stock sites.

I had to Google some of this sites an I can't say I'm that impressed. Top contributor on one of the sites is a lady with thousands of pictures shot with cell phone or similar..

I disagree. I see a lot of uses of the free stuff that might have gone to paid content instead. And the fact that the stock sites feel the need to compare themselves to the free sites says a lot. I�m sure that�s a response to market research that shows that, despite some growth in sales, they�re still losing a significant number of potential sales to the free sites.

However, they�ve dug their own graves by allowing many of the free sites to be affiliates, so they make money from the paid sites while simultaneously stealing some of their business. Of course, one of the worst is freepik, which gave away stolen vectors for years while collecting affiliate dollars from the very sites the work was taken from.

Free sites are one of the many contributors to falling income for contributors, along with market saturation, increased competition, etc.

Yes, Yes and yes! Sorry I couldn't add more than that.