Etsy Expands AI Training Rights Over Seller Content, Tightens Rules For Third-Party AI Use
Etsy is updating its Terms of Use and Privacy Policy to explicitly allow the company and authorized third parties to use seller-uploaded content to train artificial intelligence models, while tightening restrictions on how outside companies can use marketplace data and deploy AI shopping agents.
Under the updated Terms of Use, published October 26 and effective December 16, 2026, sellers and other users continue to retain ownership of the content they upload, including listing photos, descriptions, videos, reviews and community posts, but grant Etsy and third parties it authorizes broad rights to use that material.
Section 5 of the agreement already included a non-exclusive, worldwide, royalty-free, irrevocable, sublicensable and perpetual license allowing Etsy to reproduce, modify, distribute and create derivative works from user content. The previous version primarily explained those rights in the context of operating and promoting the marketplace, such as translating listing descriptions, enhancing photos or featuring sellers' products in advertising.
The revised policy retains those permissions and adds explicit authorization for AI training and development:
This also includes the right for us and our third party partners and vendors to use Your Content to develop, train, test and improve artificial intelligence and machine learning technologies, including to improve the Services and/or help keep them safe, subject to any applicable opt-out rights described in our Privacy Policy.
Etsy's accompanying Privacy Policy also adds language identifying listing information, product reviews and community posts as examples of content that may be used to train and develop AI and machine-learning models, including for features such as AI-powered listing tools and review summaries. Etsy lists this processing among its legitimate business interests.
An Etsy spokesperson provided the following explanation of the company's intended use of seller content for AI development:
"The recent update to our Terms and Privacy Policy regarding AI Models is intended to enable Etsy to use user-generated content to improve LLMs that strengthen our marketplace in service of our community, like AI-powered tools that make running a shop easier for sellers, surfacing the most relevant items for buyers, and technology that helps detect fraud."
While the updated Terms refer to applicable opt-out rights, neither policy identifies a general mechanism specifically allowing US sellers to exclude their listing photos, descriptions or other uploaded content from AI training while continuing to sell on Etsy. Sellers in the European Union and United Kingdom may have additional rights to object to processing of personal information, though those protections do not necessarily cover every type of creative content uploaded to the marketplace.
The existing license was already broad enough to give Etsy extensive rights to use seller content, so the new language does not necessarily mean the company is beginning AI training with that information for the first time. Because the license is perpetual and irrevocable, simply removing a listing or closing a shop may not terminate Etsy's contractual permission to use previously uploaded content, although the company has not clarified how it handles that material in AI training datasets or models.
Etsy has previously explored ways to incorporate seller-generated information into its AI systems, including engineering experiments detailed in August 2025 that used internal employee documents and historical seller community discussions to develop Etsy-specific question-answering tools through context engineering, rather than fine-tuning the underlying models on that information.
Liz Morton
Etsy has also restricted public access to portions of its seller community forums, making that information less accessible to outside AI companies while retaining access for its own technology development.
The updated Terms extend those restrictions, expressly prohibiting third parties from using content or data obtained from Etsy's services to develop, train, fine-tune, evaluate, benchmark or otherwise contribute to AI systems without the company's permission, regardless of whether that information was collected manually or through automated tools.
Etsy is also establishing more detailed controls over automated shopping agents, broadly defined to include bots, scripts, browser extensions and AI technologies acting on behalf of users or third parties.
Under the revised Section 6, the company reserves the right to permit, restrict or prohibit automated agents from browsing the marketplace, collecting data, interacting with accounts or executing transactions. Authorized agents may be required to identify themselves and the people or businesses they represent, while users are held responsible for actions taken by agents they deploy or authorize.
Etsy was an early partner in OpenAI's September 2025 launch of Instant Checkout in ChatGPT, allowing eligible US shoppers to purchase products directly through the chatbot. But OpenAI paused the feature just months later, shifting toward retailer-controlled shopping experiences after limited adoption and challenges with payments, inventory and other ecommerce requirements.
Etsy has continued pursuing AI shopping partnerships through its own ChatGPT app, integrations with Google and Microsoft's Copilot Checkout, alongside internally developed shopping and gifting assistants.
The new restrictions give Etsy more say over which AI shopping services can access its listings and facilitate purchases, even as it works with selected partners to bring its products into their shopping experiences. As more product searches and purchases move through AI assistants, marketplaces risk losing direct traffic and control over customer relationships to the companies operating those services.
Just four days before publishing the new Terms, Etsy announced stricter rules for AI-generated products and listing images, banning AI-created craft patterns and other functional instructions, prohibiting fully automated AI listings and requiring unedited photographs of actual products in additional circumstances.
Etsy acknowledged that buyer confusion about AI-generated content had become one of the top three barriers to shopping more frequently on the marketplace, while executives admitted the company had not always addressed seller concerns about AI as directly or quickly as it should have.
AI-generated artwork with seller creative input and disclosure is still allowed, consistent with Etsy's August 2025 AI principles emphasizing human creativity, privacy and transparency. The company also previously told sellers its AI-powered tools would be optional, allowing them to review and approve generated content, though it has not made a comparable commitment about giving sellers control over the use of their content for AI training.
Liz Morton
The update also adds new language about responsibility for Etsy's own AI-generated output, requiring users to review and evaluate results before relying on them and disclaiming warranties about the accuracy, completeness, reliability or suitability of information provided through Etsy's AI tools.
Etsy's response did not clarify whether authorized third parties can use seller content to develop AI products unrelated to its marketplace or whether the company has already been using that content for model training under its existing Terms. Questions about how the new permissions apply to previously uploaded or deleted content also remain unanswered.
