Some companies have always been terrible about this. Fan projects involving companies like Nintendo or Take Two Interactive (GTA) are like lawyer bait. Disney has hired lawyers to sue a daycare center that had (clearly unofficial) character art painted on the walls. It's dystopic, but it's the world we live in.
I didn't really expect Funko or 10:10 Games to be like that, but then again I didn't expect anyone would like Funko enough to make a fan page about their dolls.
Other companies allow fans to do pretty much whatever you want with their IP as long as you don't turn it into (too much of) a business. Sega has even hired a fan for their remasters rather than DMCA his project into oblivion.
When companies do this, I interpret this as the company giving a clear message: "don't be a fan of our work or we may apply legal pressure".
It's just so surprisingly tone deaf when things like this are done by companies that exist purely within the goodwill of their customers. Nothing that funko brings to the table has inherent value. If they have any world outlook other than to love their customers as much as they can, then they will fail in a time measured in quarters.
I'm pretty sure Funko used their service in good faith and didn't know it's based on over-aggressive AI bullshit. They're still on the hook for picking a bad company to partner with, but I don't think they intended to take down the entire domain.
I don't see a large message on the Funko site with a profuse apology for taking down Itchio. This indicates to me they fully endorse their action and are not willing to make amends.
Former employer worked a little with Funko and Disney, and it was pretty comparable. I don't see what Funko has to offer other than Licensing IP and strictly enforcing their own. Based on my (limited) experience, I doubt they chose this service by accident.
Just gonna point out that the Nintendo going after fanworks bit is a tad blown out of proportion, especially online. They're definitely known for being way too heavy handed (especially compared to the likes of Sega), but they're not exactly going after every fan project they see on the internet. Large sites whose entire purpose is to host fan games and mods for the Mario, Zelda, Pokemon, etc series have been up for decades without any issues, and most mods and homebrew projects for consoles older than the Wii U or Switch are going fine.
Unless a project is going viral in the media, raking up in a significant amount of money via a paywall or is directly competing with a current game, the chances of it getting shut down are incredibly low.
Nintendo also is responsible for keeping Dolphin off of Steam. Dolphin wanted to get on steam for improved steam deck integration and Valve reached out to Nintendo who said, essentially : Lol fuck no we will ruin your life
The courts have told Nintendo numerous times that they are in the wrong in this behavior and outlook. They have no legal means to keep Dolphin off Steam and it is a matter of judicial record that emulators are not an infringement of your IP on their own. Nintendo doesn't care and openly discusses their intent to make you suffer through lawfare. A just system would smack them down with a vexatious litigant label, but our system gives businesses infinite benefit of the doubt.
You'd think, or hope, but GoDaddy and other actors proved over the years that this is not the case. I think that the kind of site most impacted by an event like this are social sites, where if people leave, they might take their networks with them. But a normal b2c service provider just needs to update their PR and prices and business will be back to usual.
I never understood that urge of people to do "fan pages" (or fan anything, without the permission of the original creator) while at the same time blatantly ripping content.
This kind of impersonation/defamation is one of the edge cases where its good to have a DMCA process. You want to quickly take down something like this and then deal with the slow legal stuff over time.
They have a DMCA process. As far as I know it only helps in a case like this if they sue Funko or the brand management service. Itch is a small indie operation funded by actual commerce, so might not be able to afford it.
Will you be moving away from this registrar? It seems like it could very easily be abused again.