Etsy lets you sell AI art on its platform, but there’s a catch

Etsy, the online marketplace known for handmade and vintage goods, has found itself at the center of an art debate. In a move that is sure to raise some eyebrows, Etsy announced that it will now allow the sale of AI-generated art on its platform.

While Etsy is embracing the AI art trend, it does so with a few caveats. Sellers must disclose their use of AI tools in listings, and AI prompts cannot be sold separately from the final artwork. You must bundle art and how it was created.

It’s a policy that attempts to walk the line between supporting artists and preserving the integrity of Etsy’s handmade ethos. But will it be enough to appease critics and prevent the platform from being overrun by AI-generated products?

Etsy’s decision comes amid a broader conversation about the role of AI in the creative industries. As AI image generators like Midjourney and Stable Diffusion have grown in popularity, so have concerns about their impact on artists’ livelihoods.

But Etsy’s decision to allow AI art but not human-written commissions raises some unique questions about the nature of the art itself: What is automated and what is human?

Etsy is no stranger to controversy

Cover of the coloring book Midjourney

AI art can be used to create products such as coloring books (Image credit: Future)

This isn’t the first time Etsy has found itself embroiled in controversy. In recent years, the platform has faced criticism for allowing the sale of mass-produced goods and items that violate its handmade policy. In 2015, Etsy updated its policy to allow sellers to work with third-party manufacturers, a move that some said betrayed the site’s artisanal roots.

Since then, the shift has led to an influx of mass-produced items and resellers onto the platform. Investigations have also revealed a growing problem of knockoffs and dropshipping, where sellers buy cheap items from places like AliExpress and resell them on Etsy with a markup, without disclosing it to buyers.

More recently, in April 2022, Etsy sellers worldwide went further a week-long strikeand put their stores on “vacation mode” to protest Etsy’s increase in transaction fees from 5% to 6.5%. Sellers were frustrated by the increased fees on top of other costs like listing fees, payment processing, and advertising — all while the quality of the platform continued to deteriorate.

Subsequently, articles in the Washington Post, The Guardian and Forbes, among others, have regularly highlighted how the platform often exploits artists.

Why this new AI art policy matters

Ideogram versus Midjourney

AI platforms are increasingly capable of creating text and thus art that can be used for posters or products (Image credit: Ideogram vs Midjourney/Future AI)

Against this background, Etsy’s stance on AIt takes on added significance. By allowing AI-generated products but requiring disclosure and banning the sale of prompts, Etsy is attempting to strike a balance between embracing new technologies and preserving its identity as a marketplace for human crafts.

The policy is also important because it could set a precedent for how other platforms handle AI art. As more creatives experiment with AI tools, sites like Society6, Redbubble, and Zazzle could look to Etsy’s approach as a model.

But does this policy really do what it promises? Will banning AI prompts be enough to mitigate the incoming onslaught of low-quality, high-volume, automated artwork? Let’s unpack it.

Starting in July, Etsy introduced four new labels that the platform will use to categorize product listings based on the seller’s role in creating the item:

“Created by”: For physical items that have been manufactured, modified or assembled by the seller by hand or using his own tools
“Designed by”: For original designs by the seller (including seller-driven AI art) that are offered as digital downloads or produced/printed by a third party
“Source:”: For items such as craft supplies and party decorations that stimulate the buyer’s creativity
“Handpicked by”: For vintage items, items from nature and carefully curated collections selected by specific sellers

Sellers can use their original prompts in conjunction with AI tools to create artwork for sale on Etsy. However, AI use must be properly disclosed in the product listing. And while AI can be used in the creative process, Etsy prohibits the sale of AI prompt bundles alone without accompanying finished artwork. The company believes that prompts are an integral part of the creative process and should not be sold separately.

But does banning the sale of AI prompts do anything to reduce mass production? Prompts, written by real engineers and artists, represent the only human element of this art. While one could argue that this ban will prevent plagiarism of the creative process, that doesn’t really hold up either. What’s to stop a seller from sourcing these AI prompts from any number of other platforms and then selling the art on Etsy?

What this means for artists and entrepreneurs

For artists and entrepreneurs who sell on Etsy, the new policy presents both opportunities and challenges. On the one hand, AI tools can help them generate new ideas and create products more efficiently. An illustrator can use Midjourney to brainstorm concepts, or a pattern designer can use automated tools to quickly generate multiple variations.

However, artists need to be transparent about their use of AI. They may face increased competition from vendors who are mass-producing AI-generated designs. Artists also need to be careful not to run afoul of new regulations around selling prompts.

There’s just no good way to position yourself as a marketplace for custom designs and vintage artwork while also selling AI-generated designs. Etsy may soon find out.

Unfortunately, the new policy does little to protect artists and buyers from the mass production of low-quality artwork. Rather, it legitimizes the sale of AI art on Etsy, making it even harder for the platform to implement policies that will preserve its image as an artisanal marketplace in the future. Banning the sale of prompts does little to address the problem.

Anticipating a negative reaction, Etsy has already partnered with a creative agency called Orchard Creative to launch a new ad campaign about how much the platform cares about human artists. Out-of-home ads are placed intimately at street level in NYC and London to be accessible, while large Etsy billboards scream “What does a robot know?” with a crumpled robotic arm in the background elsewhere.

But propaganda aside, the new policy does little to protect the interests of the artists the platform cares about. While there’s clearly a market for AI art, Etsy seems to want to have it both ways. There’s simply no good way to position yourself as a marketplace for custom designs and vintage artwork while also selling AI-generated designs. Etsy may find that out for itself soon enough.

Som Manacor

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Etsy lets you sell AI art on its platform, but there’s a catch