The EU’s system of knowledge-based liability for hosting service providers in respect of illegal user content – between the e-Commerce Directive and the Digital Services Act Wilman Folkert Over the past two decades the principle of knowledge-based liability has been the backbone of the EU’s regime regulating the liability of social media companies, online marketplaces, cloud storage providers and many other online service providers that store and disseminate user-generated content. This article traces the origins, identifies the rationale, assesses the continued relevance and discusses the main strengths and shortcomings of this approach. It is argued that, counter-intuitive as it may seem to some, there are good grounds for retaining the key features of the current liability system, which conditionally shields such service providers from liability for their users’ content. Most important is the system’s ability to strike a fair balance between the conflicting rights and interests of the parties involved – not only the service providers and the users, but also the parties aggrieved by the content. That is not to say, however, that the system has no shortcomings. In particular, the system’s effectiveness in terms of tackling illegal user content causing serious ‘public’ harm could be improved, whilst the system also involves significant risks of unjustified removal of user content. These shortcomings do not mean that the current knowledge-based liability system should be discarded. Instead, it should be improved. Not by excluding certain service providers from the scope of the liability exemption or adding conditions, but rather by enacting complementary requirements. Against this background the article assesses to what extent the recently proposed Digital Services Act addresses the identified shortcomings. Digital Services Act (DSA) e-Commerce Directive hosting service providers intermediary liability notice and action 340 periodical academic journal JIPITEC 12 3 2021 317 341 2190-3387 urn:nbn:de:0009-29-53432 http://nbn-resolving.de/urn:nbn:de:0009-29-53432 wilman2021