5 Things You Agreed to in Etsy's Terms of Use (and probably didn't even know)

If you're like most people, you probably signed up for a platform like Etsy without reading through their Terms of Use. But, those Terms of Use are essentially a contract between you and the platform and by using the site you are agreeing to be bound by them. I've combed through their Terms of Use and found five things that you might not have realized you agreed to when signing up for the service.


Are these deal breakers? No, these should not be things that prevent you from using the platform as part of your business strategy. However, they are important to be aware of and mean you should always have a contingency plan in place.


1. You automatically agreed to their terms of use by using the website.


Did you read all of the fine print before you started your Etsy shop? No? Well you’ve agreed to it whether you read it or not. Etsy explains this in Section 1 of their Terms of Use that states “By using any of our Services (even just browsing one of our websites), you’re agreeing to the Terms. If you don’t agree with the Terms, you may not use our Services.” This means that ignorance is not bliss and you’re going to be governed by these Terms of Use (including the areas discussed in this article below) by using or continuing to use the platform.


2. Etsy can theoretically use your content however they’d like.


In Section 5(c), Etsy states that “By posting Your Content, you grant Etsy a non-exclusive, worldwide, royalty-free, irrevocable, sub-licensable, perpetual license to use, display, edit, modify, reproduce, distribute, store, and prepare derivative works of Your Content.” Does that sound like a lot of legal mumbo jumbo? Well that’s because it is. Let’s break this down term by term.


Your allowing Etsy to use your content as follows:

  • Non-exclusive – it can be used elsewhere by you, Etsy has no exclusivity over your content.
  • Worldwide – it can be used anywhere in the world .
  • Royalty-free – Etsy doesn’t have to pay you to use your content .
  • Irrevocable – you don’t have the opportunity to change your mind and tell Etsy to stop using your content. 
  • Sub-licensable – Etsy can sublicense your content under the terms of the license you gave them .
  • Perpetual – the license does not expire.

So why does Etsy want all these rights? Part of it is because they need these rights for Etsy to function as a platform. For example, if you upload a product photo on Etsy, they need the ability to display it show it to customers, to store and reproduce it to back up their platform, distribute to show to potential customers, derivatives to use as part of advertising, and so on. However, there are no explicit limits on this license and you don’t have ability to terminate the license.


3. Etsy can terminate your account at any time and they don’t need a reason.


This will likely be the most shocking part of the Terms of Use for most sellers. Per Section 7, Etsy “may terminate or suspend your account (and any related accounts) and your access to the Services at any time, for any reason, and without advance notice. If we do so, it’s important to understand that you don’t have a contractual or legal right to continue to use our Services, for example, to sell or buy on our websites or mobile apps. Etsy may refuse service to anyone, at any time, for any reason.”


There is a lot of concern about the “three dings” Etsy policy for IP infringement, but the truth is Etsy can shut your shop down whenever they’d like for any reason, or for no reason at all. Even more, they don’t have to provide you with advance notice of the termination. The really ugly truth here is that you don’t have any recourse against Etsy if this occurs. They even explicitly state this when the indicate that you have no contractual or legal right to continue to use their services.


4. Etsy doesn’t guarantee their platform will work.


If you’re building your business on Etsy, it can be incredibly frustrating when the algorithm changes or there are glitches in the system. Again here, there is no recourse as a seller. Specifically, in Section 8 Etsy explains that “You understand that our Services are provided “as is” and without any kind of warranty (express or implied). We are expressly disclaiming any warranties of title, non-infringement, merchantability, and fitness for a particular purpose, as well as any warranties implied by a course of performance, course of dealing, or usage of trade.  We do not guarantee that: (i) the Services will be secure or available at any particular time or location; (ii) any defects or errors will be corrected; (iii) the Services will be free of viruses or other harmful materials; or (iv) the results of using the Services will meet your expectations. You use the Services solely at your own risk. Some jurisdictions do not allow limitations on implied warranties, so the above limitations may not apply to you.”


Breaking this down, here are some of the important practical effects of the above:

  • Etsy does not provide you with any guarantees or warranties about the service
  • Etsy does not guarantee that the site will be secure or available.
  • Etsy does guarantee that they will address and defects or errors within the platform or algorithm.
  • Etsy does not guarantee that you’ll be satisfied with your use of the services.


5. You waive your right to a trial before a judge with a jury and the ability to bring a class action lawsuit.


Finally, if you have a dispute with Etsy, you are giving up your right to a trial before a judge and jury and must instead participate in binding arbitration. You also waive the ability to bring any kind of class action against Etsy, whether in court or arbitration, meaning that all disputes have to be resolved individually. This is all contained in Section 11, which provides that “You and Etsy agree that any dispute or claim arising from or relating to the Terms shall be finally settled by final and binding arbitration… Any arbitration under the Terms will take place on an individual basis--class arbitrations and class actions are not permitted. You understand that by agreeing to the Terms, you and Etsy are each waiving the right to trial by jury or to participate in a class action or class arbitration. 


The purpose of this post is not to scare you away from using Etsy as a platform to sell your work, but it is a reminder to know what the terms of your agreement with Etsy are. Being informed is a huge piece of the puzzle. By knowing what Etsy can and cannot do, you can better prepare yourself and your business to handle any issues that might arise with the platform.


All of the excerpted text in this post can be found in Etsy’s official Terms of Use located here: https://www.etsy.com/legal/terms-of-use   

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Legal Disclaimer: Legally Empowered and Magnate Holdings, LLC are not law firms. All content contained on this website is for informational and educational purposes only. If you have questions about your specific situation, you should contact an attorney licensed in your jurisdiction. The primary author of this website is Dana Bucy Miller who is a licensed attorney, but the information contained on this site is expressly legal information and in no way should be considered legal advice. Legal advice and services can be obtained through Dana Bucy Miller's law firm DM Law, LLC. Any option to engage legal counsel will be serviced by DM Law, LLC. 

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