Etsy updates AI policies after user criticism

Etsy acknowledged it had not always addressed the topic of AI as directly or as quickly as users may have wanted, stating this in the policy update. The company said AI is threatening buyer trust and the platform has a responsibility to protect it. Etsy described the changes as a starting point, not the finish line.

Some digital items, like audio files, don't have visual elements. For those listings, representative imagery, including AI-generated images, is allowed as long as it does not mislead buyers about what they are purchasing. Photo-editing tools, including AI, are allowed for adjustments to other listing images as long as those edits do not make the item appear different. If the item received by buyers is materially different from the listing images, the seller may be responsible for a refund.

Etsy is introducing a specific reporting option for “misleading AI-generated images”. At this stage, reports filed through this feature are only intended to help Etsy better understand how members perceive potential AI misuse. AI-generated art such as prints remains permitted “when sellers play a clear creative role in what they create and are transparent about their process”.

The policy's effectiveness is already being questioned. Earlier this month, the ABC reported on Lucy Cooper, a Hobart-based crochet artist whose beanie pattern was offered as an AI-generated version on Etsy. The listing was published on October 28. Ms Cooper said it was good Etsy was doing something, but called the changes “a little bit of a laugh”, arguing the platform was addressing the problem without actually doing much about it. “The problem is people aren't being honest,” she said. “If you're the platform owner, you have to do something to make it so that this can't happen.”

Ms Cooper also criticised the reporting feature, saying that if the platform is not going to act on reports, there is no point in having it. She said reported items should be immediately taken down, or reporters should be notified about what is happening with them.

Reaction from the broader Etsy community is mixed. A seamstress named Jade said in an Instagram post that Etsy seemed not to want to demonise AI use, which she felt could alienate anti-AI buyers and sellers. Another user commented that banning AI outright would mean many shops would close, arguing that AI has a place in the creative process and needs guidance. Molly, a crochet artist, said the changes were positive and asked whether Etsy would take a proactive approach to finding AI-generated pattern listings, adding that she would believe it when she saw it.