To Host or Not to Host: Rethinking Intermediary Liability Exemption in the DSA

Intermediary liability exemption in the Digital Services Act (Regulation 2022/2065, ‘DSA’) is generally interpreted as being unchanged compared to the e-Commerce Directive (Directive 2000/31). Conditional liability exemption strikes a balance between the interests of hosting providers, people affected by illegal content, and the freedom of expression of the general public. However, hosting providers and their role in society have evolved significantly since the adoption of the e-Commerce Directive. Despite their position as key infrastructure in the public debate and their sophisticated content moderation processes, they enjoy a seemingly widening exemption from liability in CJEU case law. This article argues for a narrower scope of application for intermediary liability exemption for hosting services guided by due diligence obligations and duties of care created in the DSA and sectoral regulation. This can benefit aggrieved parties in holding platforms liable and inspire better moderation of illegal content. A narrower interpretation of the liability exemption can be justified by compliance with requirements on notice-and-takedown mechanisms, a fairer economic burden of moderation, improved moderation capacity, and the geopolitical tensions which strain effective content moderation. The DSA provides clear due diligence obligations in Articles 16 and 23, and sectoral regulation requires diligence regarding specific types of content. These obligations can be used to exclude undiligent or bad faith actors from the liability exemption. This better reflects hosting providers’ positions as powerful actors and ensures a liability exemption that does not reward negligent or laissez-faire approaches to content moderation by actors that stand to gain monetarily from structurally hosting illegal content.