Etsy has been facing challenges with an influx of generic and AI-generated products. To address this, the platform revised its seller policy on Tuesday, introducing new labels that clarify the origin and creation process of items sold. This is the first time Etsy has directly addressed artificial intelligence in its seller policy, providing clear guidelines on acceptable practices.
Etsy’s updated “Creativity Standards” require sellers to categorize their products based on the level of human involvement. Over 100 million items on the platform must now include labels under the “Item Details” section in their descriptions. These labels help buyers understand how much of the product’s creation involved human effort versus AI or other tools.
Label Definitions
- Handpicked: Items selected by the seller, typically vintage goods.
- Sourced: Craft and party supplies acquired by the seller.
- Handmade: Products physically made by the seller or with tools such as a 3D printer or Cricut machine.
- Designed by: Items designed using AI tools, external production partners, or other digital tools.
The “Designed by” label is a response to the growing presence of AI-generated items on Etsy. The platform has received criticism for allowing AI art, which some argue undermines traditional artists. Despite these concerns, Etsy permits the use of AI, as long as sellers are transparent about it.
According to Etsy’s Seller Handbook, sellers can use AI tools to create artwork from their original prompts. These items must be labeled as “Designed by,” indicating the potential involvement of generative AI. Examples include fantasy scenes based on the seller’s prompts or custom pet portraits generated with AI. Sellers must disclose any AI use in the listing description.
Prohibiting AI Prompt Sales
While Etsy allows the design of items using AI, it now prohibits the sale of AI prompts themselves. Listings such as “10,000 Midjourney Prompts” or “Ultimate ChatGPT Prompts Pack” will be flagged and removed. This new rule aims to maintain the platform’s integrity by preventing the sale of AI-generated content templates.
During the first-quarter earnings call, CEO Josh Silverman emphasized Etsy’s dedication to “keeping commerce human.” Silverman noted that the company had removed four times as many listings violating its Handmade policy compared to the previous year. This commitment reassures investors and sellers that Etsy is serious about maintaining a marketplace rooted in genuine craftsmanship and creativity.
Etsy’s new seller policy, with its detailed labeling requirements and clear guidelines on AI usage, aims to preserve the platform’s authenticity. By ensuring transparency and setting boundaries for AI-generated products, Etsy strives to support traditional artisans while adapting to technological advancements. This balance is crucial for maintaining the trust and satisfaction of both buyers and sellers on the platform.
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