The news: Etsy is implementing stricter rules around the use of AI on its platform to strengthen trust among buyers and sellers and keep AI-generated content from overwhelming its marketplace.

The details: Etsy noted that its new AI guidelines aren’t a rejection of the technology, but rather a way to help buyers make more confident decisions about what to purchase.

• Sellers are now required to have at least one unaltered photo of the product against a real background, although they can include supplemental AI-assisted imagery if it accurately represents the item.
• The company is explicitly banning listings made by bots without human involvement, as well as any “AI use that misleads buyers or creates fraudulent inventory,” James Ossman, head of customer operations, wrote in a blog post.
• Etsy will also no longer allow the sale of AI-created recipes, patterns, or similar guides. Listings for these products must display a real item made using the instructions.

These changes will be supported by more robust methods of identifying fraudulent listings and misleading imagery, new features that allow users to report product pages they believe may contain misleading AI content, and more detailed insight on where AI has been used on content across Etsy.

Implications for retail: It makes sense for a platform like Etsy, which was built to promote human creativity, to clamp down on the use of AI-generated listings and imagery. As the company noted in a message to sellers, shoppers’ inability to distinguish between items with AI-generated content and those without is a “top-three barrier to shopping more often” on the platform, making it a crucial problem to tackle as Etsy looks to drive consistent growth.

The crackdown could also help Etsy win back sellers, many of whom have left the marketplace in recent months due to frustration over the platform’s AI policies and declining sales.

Having clearer rules about the use of AI, as well as reducing AI slop on its platform, could enable Etsy to differentiate itself from competitors with laxer guidelines. It could also bring Etsy closer to achieving its mission to “Keep Commerce Human.”

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