MPs have welcomed news that the government is considering personally fining social media executives deemed to have failed to meet their duty of care to users, with one calling the decision a “massive step forward in making companies actually liable” for activity on their platforms.

The Guardian revealed on Thursday that the online harms white paper, due to be published on Monday, will call for the creation of a regulator with the power to draw up codes of conduct for social media firms. It also proposes serious punishments for companies that breach the codes and in doing so fail to meet their duty of care.

“It’s not good enough to allow people like Mark Zuckerberg to set the rules for the internet,” said Damian Collins, the chair of the Commons digital, culture, media and sport committee, who headed an inquiry into fake news and disinformation last year.

“We should look at problems online and say it’s causing harm, it’s harming often very vulnerable people because of content they’re engaging with, and the companies that host that and serve it and direct people to it should be responsible. And they will be held liable for it if they don’t act against unlawful content.”

In an interview with BBC Radio 4’s Today programme, Collins added: “We need to see this regulator set up as soon as possible, because we need this in place now. We can’t afford to wait too long.”

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Labour’s deputy leader, Tom Watson, echoed the welcome but said a real solution could not be reached until competition policy was overhauled as well – a topic that the white paper avoids.

“We’ve been calling for a social media regulator for a year, so we’re pleased the government has adopted that,” Watson said. “They’ve been completely unaccountable for the last 10 years. And if you look at Facebook, a company that facilitates the livestreaming of a massacre, they are beyond any norms of ethics and moral behaviour.

“Our concern is that whilst these proposals are a good first step, they don’t really address the root of the problem which is market failure. Frankly, Google and Facebook are too big. They dominate too much of the digital advertising market. They think they’re unaccountable to their customers and market and in those cases government must step in to regulate the market and get it back on track.”