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AI Warning Issued to Millions of Online Shoppers


Etsy, the online marketplace known for selling handmade and vintage items from independent sellers, has introduced significant changes to its seller policies amid rising concerns over the influx of generic and AI-generated products.

The new regulations aim to maintain transparency and authenticity, ensuring that shoppers know exactly what they are purchasing and the level of human involvement in the creation of these items.

The Context

First founded in 2005, Etsy is known for one-of-a-kind products made by independent artists. The company also provides tools and support for small businesses to manage their shops and reach a global audience.

The Etsy NYC headquarters building is seen on December 13, 2023 in New York City.

Michael M. Santiago/Getty Images Entertainment/GC Images

Etsy has been facing criticism for the increasing presence of AI-generated products on its platform, which has raised ethical concerns among traditional artists and buyers.

What We Know

Etsy revised its seller policy on Tuesday, implementing new “Creativity Standards” that require sellers to clearly label their products based on the degree of human involvement.

This move marks Etsy’s first direct engagement with artificial intelligence in its seller guidelines, according to Tech Crunch.

The “Handmade” label applies to products physically made by the seller or with the assistance of tools like 3D printers according to Tech Crunch.

The “Designed” label, however, is a new category introduced to address AI-generated items. Sellers using AI tools to create their designs must label these products as “Designed by,” indicating that AI or other digital tools were involved in their creation. This ensures buyers are aware that the products may not be entirely handmade​, according to Tech Crunch.

Despite the backlash against AI-generated art, Etsy has embraced the technology under certain conditions. Sellers can use AI tools for creation but must disclose this in the product description. However, the sale of AI prompts, such as “10,000 Midjourney Prompts,” is strictly prohibited, and listings of this nature will be removed from the platform starting today,​ according to Tech Crunch.

Newsweek reached out to a representative of Etsy’s press team via email for comment.

During Etsy’s first-quarter earnings call, CEO Josh Silverman emphasized the company’s commitment to keeping “commerce human,” according to Tech Crunch.

He said that Etsy removed four times the number of listings violating its Handmade policy compared to the previous year.

What’s Next?

These changes are expected to improve transparency and trust among buyers, allowing them to make more informed purchasing decisions. As the debate around AI-generated art and products continues, Etsy’s new guidelines could set a precedent for other online marketplaces grappling with similar issues.

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