The new law (NetzDG, roughly "network enforcement act" [1]) was intended to facilitate applying existing laws against illegal content, by mandating that every site with > 2 million users needs to have a clear procedure for reporting illegal content.
Unfortunately, there are only fines for failing to delete obviously illegal content and none for just deleting everything that is reported and not obviously legal. The law makes provisions for handing over tricky cases to an external agency, but expected the companies to jointly set it up themselves ("regulated self-regulation"), which they didn't do; likely because the people checking reports at such an agency are legally mandated to be competent.
[1] https://www.gesetze-im-internet.de/netzdg/BJNR335210017.html