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Etsy is revamping its policies to clearly define which products are suitable for its platform, addressing both sellers and buyers. This update comes as Etsy faces increased competition from Amazon and emerging e-commerce platforms like Temu and Shein.
However, Etsy has not been without rife where counterfeit items and other items listed that violate Etsy’s policies.
Some sellers intentionally misrepresent counterfeit goods as genuine, tricking buyers into purchasing either high-quality imitations or completely bogus goods.
Basic searches on the internet marketplace yield numerous sexual photographs that seem to breach Etsy’s terms of service.
TheStreet.com reported that Etsy, an online marketplace known for selling a wide range of handmade products, has now become host to numerous shops selling pornographic images generated by artificial intelligence (AI). The term “AI Girl” yields explicit search suggestions, such as “AI Girl Squirting,” and returns multiple pages filled with explicit or suggestive images of women created by AI. Some of the available listings also seem to infringe on existing trademarks.
TheStreet has identified listings that offer NSFW (not safe for work) AI-generated images that resemble characters such as Rapunzel from Disney’s “Tangled,” Princess Jasmine from Disney’s “Aladdin,” and She-Hulk from Marvel’s “She-Hulk.” Source: TheStreet.com
Etsy’s terms of use explicitly prohibit pornography, although the platform does permit the restricted sale of “mature content.” While Etsy’s policies don’t clearly delineate the difference between pornographic and mature content, they do specify that mature content must adhere to a set of guidelines, including the requirement to tag each listing as “mature.”
However, Etsy’s current policy for selling so-called “ Mature” items must adhere to these guidelines as listed on Etsy’s website. “ When listing an item with mature content, the first thumbnail image in your listing should be adequately obscured. Additional images in the listing may show the item in its entirety. Listings containing mature content must also be tagged with the word “mature.” Mature content falls into three categories:
1. Nudity Most kinds of nudity aren’t allowed on Etsy (see our Adult Nudity and Sexual Content Policy for more information). However, we do allow items containing photos and photo-realistic depictions of buttocks and nipples, so long as these body parts are obscured in the first image of the listing. Graphic mature content also may not appear in the public areas of your account, including but not limited to username, avatar, or shop home.
In its annual transparency report, Etsy said potentially non-compliant content was flagged 36 million times last year, double the figure for 2021, as it policed areas such as counterfeit goods, product safety, and handmade claims more closely. In total, it removed 1.9 million listings for violating its policies in 2022, a 16% increase from 2021.
“We’re positioning ourselves to highlight original goods and genuine creators by enhancing the unique qualities that make Etsy, Etsy,” said CEO Josh Silverman in an interview with CNBC. Etsy, known for its handmade and vintage items, will now categorize products under four new classifications: “made by,” “designed by,” “handpicked by,” and “sourced by.” All items must fit into one of these categories to be sold on the platform.
Despite the new classifications, the policy will continue prohibiting reselling items made by others. The company’s 2013 policy allowed sellers to use outside production assistance, like contracting garment factories during the COVID-19 pandemic or using print-on-demand services for graphic designs. However, the platform still struggles with counterfeit designer merchandise and an influx of generic and AI-generated products.
To address these issues, Etsy has introduced new labels that specify whether an item is made, designed, sourced, or handpicked by the seller. This is the first time Etsy has directly addressed AI-generated products in its policies, setting clear guidelines on what is acceptable. The platform has faced criticism for allowing AI-generated art, which many traditional artists see as a threat to their work. Despite these ethical concerns, Etsy is incorporating AI technology into its platform with defined boundaries.
CNBC reported, “In December, Etsy laid off 11% of its workforce, with Silverman citing the “very challenging macro and competitive environment” as reasons for the cuts.
Etsy thrived during the pandemic, but now, sales are declining, and the stock has lost over 70% of its value. Missed earnings in 2023 and 2024 revealed further disappointing results. As the company strives to recapture growth while competing with leaders like Walmart, Sears, Amazon, and eBay, there are still many uncertainties ahead.
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