Etsy : 2023 Transparency Report

2023 Transparency Report

90M

active buyers

7M

active sellers

+100M 

items for sale

2

All about Etsy

Since 2005, Etsy has connected millions of buyers and sellers around the world, motivated by a shared mission to Keep Commerce Human.

At Etsy, we're focused on elevating the best of our marketplace to help creative entrepreneurs grow their businesses. We continue to invest in making Etsy a safe and trusted place to shop, so sellers' extraordinary items can shine.

Today, there are more than 100 million unique items available for sale on our marketplace, and our vibrant global community is made up of over

90 million active buyers and 7 million active sellers, the majority of whom are women and sole owners of their creative businesses. To support this growing community, our Trust & Safety team of product, engineering, data, and operations experts are dedicated to keeping Etsy's marketplace safe by enforcing our policies and removing potentially violating or infringing items at scale. In 2023, we invested more than $50 million in the team's people, technology, and operations because we know how important it is to keep Etsy special, unique, and safe as our community grows.

Since 2015, we've released a Transparency Report annually to share our progress in this work. This report, covering January to December 2023, gives you an overview of our content policy enforcement, intellectual property takedowns, order issues, and requests for member information. We also share a glimpse into our priorities and progress for the year to come. We're not required to share all of this information, but we choose to provide it because we're committed to transparency. It's also one of many ways we continue to uphold our core company value of building a trusted brand for Etsy buyers and sellers.

This report only covers the Etsy marketplace and none of Etsy, Inc.'s subsidiary brands.

2023 Transparency Report

Below is a detailed account of our efforts in 2023 to make our marketplace safer and more secure, and to keep it uniquely Etsy. Highlights include:

• Overall, we improved the accuracy and precision of our controls by 5x, enabling us to double the number of listings we removed for violating our policies.
• We removed four times as many listings for violating our Handmade Policy and we reduced the rate at which users came across content that violated our Handmade Policy on our site by 60%.
• We removed 216% more listings for potential IP or counterfeit violations due to more proactive detection and enforcement.
• We reduced the time it takes for cases to be resolved to an average of just two hours, a significant improvement from the year before. This means buyers and sellers are getting the help they need even faster when issues arise.

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94%

of flags generated by our internal automated systems

4

Policy Enforcement

We expect every user to follow our policies, which we call Our House Rules, to ensure that Etsy remains a marketplace where creativity, authenticity, and diversity thrive. We strive to write our policies as clearly as possible to help members around the world understand their rights and responsibilities when using Etsy. When sellers open a shop on Etsy, they commit to following our Terms of Use, including our Seller Policy, which outline what can be sold on Etsy and our customer service standards. Our Trust & Safety team is dedicated to detecting potential content violations and enforcing our policies when items or member accounts are flagged for violations. This includes actions like listing mass-produced items in our handmade categoryor attempting to sell items outlined in our Prohibited Items Policy. Our team uses a combination of automated systems and human review by policy specialists to monitor and remove policy-violating listings and shops. Flags from our community members and trusted authorities are also an integral part of our Trust & Safety process. We strive to consistently enforce our policies and hold all members accountable to the same standards to strengthen trust in our community and maintain the integrity of our platform.

Insights from 2023

One of our key focus areas this year was improving the accuracy of our internal automated systems that detect potentially violating listings. In 2023, we made our internal automated detection systems five times more precise than they were in 2022. This enabled us to remove more than double the number of listings (3.8M) for violating our policies compared to the year prior, while reducing the overall number of flags by 10%. 94% of our flags were generated by our internal systems.

If we determine that a flagged item violates Etsy's policies, we'll remove the item from the marketplace and notify the seller. In some cases, and with sellers who repeatedly violate our policies, we'll permanently refuse service to a member. In 2023, most actions were a result of alleged violations of our Intellectual Property Policyand Handmade Policy. Of the accounts we took action against in 2023, 47% were sellers based in North America and 30% were sellers based in Europe.

Community reporting continues to be an important part of our policy enforcement process, and we want to equip our members with the right tools so they can more easily play their part in keeping our marketplace safe. We launched an updated member flag interface that better aligns to our marketplace policies. This way, members can more specifically identify the reason they're flagging the item so it gets to the right team more quickly for a manual review.

2023 Transparency Report

Policy Enforcement

Listings Flags, by source

Etsy's automated systems
Community	6%

94%

Accounts actioned for policy violations, by region

SOURCE	PERCENTAGE
Etsy's automated systems	94%
Community	6%

North America
Europe
Asia	19%

Rest of World

5%

47%

30%

REGION

North America

Europe

Asia

Rest of World

PERCENTAGE

47%

30%

5%

19%

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Policy Enforcement

Community

Reporting

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Policy Enforcement

Enforcing our Handmade Policy and measuring our progress

Another top priority in 2023 was continuing to expand enforcement of our Handmade Policy, which requires that items listed as "Handmade" be either made and/or designed by the seller. These unique items created by Etsy sellers are what differentiates Etsy from any other online marketplace. We invested in improving our technology and expanding our detection capabilities to ensure Etsy remains the destination for special, one-of-a-kind, and handcrafted items. As a result of all of these initiatives, we removed more than four times as many listings and suspended two times more sellers for violating our Handmade Policyin 2023 than the previous year.

Our goal is to ensure users come across potentially violative items as infrequently as possible. To this end, we introduced a new metric in April 2023 that seeks to estimate how often users may be seeing listings that may violate our Handmade Policy, before we have the chance to remove them. We call this the Not Handmade Violative View rate (VVR). By the end of 2023, we reduced the Not Handmade VVR to the low single digits, a 60% improvement from April. A few efforts and initiatives helped us make progress in this area, including:

• Improving the precision of our automated detection systems, including enhancing the tools that help us detect when items are potentially being resold on Etsy from mass-market sites.
• Adding more human reviews to our enforcement processes. While automated systems allow us to review the millions of listings on Etsy, human reviews are critical to ensuring those decisions are accurate. Now, when a listing is flagged by our automated controls for potentially violating our Handmade Policy, it'll remain active but not appear in search results and recommendations in order to give our specialists time to review the listing. Our team will determine if it should be removed, or if it can be sold on Etsy and be made visible again. The review process typically takes between 24 and 48 hours.
• Improving integrity across our ecosystem. In addition to our efforts to remove listings that violate our policies, we're working to prevent non- handmade items from making their way onto Etsy in the first place:

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• • For sellers: We're better emphasizing Etsy's policies during the listing process. We've added messaging and reminders about what types of items and listing images do and do not belong on our marketplace.
  • For third parties: Many companies integrate with Etsy via our public API to provide sellers with a wide range of valuable tools and services. In 2023, we revoked API access to several companies whose products enable the listing and selling of mass-produced,policy-violating items.
• Bringing more rigor to programs like Star Seller and Etsy Picks, to ensure we don't unintentionally highlight items that may violate our policies.

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Intellectual Property Enforcement

As a venue for artists, designers, and makers, Etsy takes intellectual property rights seriously. We require sellers to confirm they have all necessary intellectual property rights for the content they upload to their Etsy shop. Our Intellectual Property Policyis based on industry best practices, worldwide intellectual property laws, and region-specific laws such as the Digital Millennium Copyright Act (DMCA). Our Legal Response and Enforcement team is responsible for reviewing reports of alleged infringement. Under our policies, rights-holders (or their authorized representatives) can submit IP reports identifying content that they believe infringes their rights via the Etsy Reporting Portal, a central hub for reporting potential IP violations. Our enforcement team reviews every submission, and Etsy is committed to quickly removing any reported listings that do not comply with our Intellectual Property Policy, as well as clearly communicating actions taken as a result of reports to affected members and third party reporters.

Insights from 2023

The Etsy Reporting Portallets rights-holders (including sellers) and their agents to more easily report alleged infringement. Users can save their information, report multiple listings at once, and track the status of their reports. In 2023, the majority (approximately 57%) of all IP reports we received were submitted through the Etsy Reporting Portal, and usage continues to grow each month. In 2023, Etsy processed 122,927 alleged infringement reports, a 24% increase from the year prior, and we removed a total of 1.2 million listings-a 10% increase from 2022.

We also continued to scale and enhance our anti-counterfeiting program through innovative products and technologies in 2023, including leveraging machine learning. We removed 1.45 million listings in 2023 for potential counterfeit violations through flags generated by our internal systems, a 216% increase compared to 2022, reflecting enhancements to our proactive controls to combat potential IP violations and counterfeiting. We closed 31,635 shops for repeat infringement and/or counterfeiting violations, a 25% increase from 2022. Tackling counterfeit items continues to be a priority for our Trust & Safety team and we'll continue to thoughtfully expand our enforcement efforts, partner with rights-holders to remove suspected counterfeit goods, and leverage technology to more quickly detect and remove those listings.

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Reporting parties formally withdrewtheir reports(s) of alleged infringement for 2% of reported listings. We also rejected 26% of reports in 2023, a

54% increase from 2022, indicative of our increased focus on preventing fraudulent and abusive takedown notices. Etsy may reject a report of infringement if we're unable to verify that the person submitting the report is authorized to act on behalf of the intellectual property owner, when the description of the intellectual property is insufficient, or when the report otherwise fails to comply with Etsy's requirements. When a seller's listing is removed in response to a copyright infringement report, in certain cases,

sellers can file a counter-notice in accordance with the Digital Millennium ~122,927Copyright Act (DMCA). In 2023, sellers filed counter-notices for 9% of

copyright infringement reports, 9% more than 2022.

processed alleged infringement reports

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