It is a good thing that both Facebook and Google, the technology companies that act as gateways to the world’s online information, have acted to stem the spread of internet “fake news” by targeting how phoney content producers make money: advertising. These two giants control almost half of the worldwide digital ad business. So there’s little doubt of their influence. There’s also a wealth of information to suggest that social media is where the world increasingly gets its news. This trend is particularly pronounced in America, and the fear is that people are seeing – and believing – a fake news story that is little more than a teasing headline and a tissue of lies. According to one report, more than 100 pro-Trump phoney sites were being run from a single Balkan town. There can be no defence for passing off falsehoods as journalism for money, so tech companies have done the right thing.

But this has to be the beginning of a re-examination of social media’s role in a democracy too. New technology has to some extent democratised politics – lending a voice and power to those who had neither. It has breathed life into movements such as the Indignados in Spain and Black Lives Matter in the US. But it has also been used by xenophobes and extremists. Democracies are becoming more pluralistic and chaotic. More troubling is social media’s role in weaving wild, baseless attacks into the warp and weft of political life. The right in American politics has long peddled conspiracy theories, paranoia and not-so-coded attacks on racial minorities. Hillary Clinton has been smeared for decades. John Kerry’s presidential ambitions were capsized by false claims he was a medal-grabbing phoney in Vietnam. In 2009, a New York Times bestseller was titled Culture of Corruption: Obama and his Team of Tax Cheats, Crooks and Cronies. With social media these heated falsehoods have been amplified. Donald Trump has 15 million Twitter followers, almost 10 times the nightly audience of Fox News. Most messages are seen by millions more because they are shared thousands of times and get extensive mainstream coverage.

The allegation that social media trades on intensifying prejudice and spreading misinformation within a group of like-minded friends has focused on Facebook. While the company’s founder, Mark Zuckerberg, dismissed the idea that Facebook had won the election for Trump, there are reports that company executives have been asking if they had played a hand in moulding opinion. The company’s own research found that people are influenced by their peers. The problem is in part Facebook’s business model. Unlike Google News – which only points to links from “whitelisted” news sites and then uses a ranking system to assess their quality – Facebook relies on providing a stream of news from anywhere. Facebook’s algorithm is designed to pick out popular articles – it shows each post to a small subset of followers, and then only promotes it if it generates likes, comments and shares.

At the heart of the company’s dilemma is whether it is a media company or not. Facebook wants to publish news and profit from it, but it does not want to act as a traditional news organisation would by separating fiction from facts using human editorial judgment. By relying on algorithms Facebook privileges engagement, not quality. It acts as a publisher without accepting the burdens of doing so. Yet, as Aldous Huxley noted, “facts do not cease to exist because they are ignored”. By disregarding the obvious, Facebook will be drawn deeper into debates about its impartiality. It has already been caught out: earlier this year the company was accused of censoring conservative stories in its Trending Topics section. The company sacked its human editors, placing further faith in its computers, but with predictably disastrous results. Facebook would be wise to accept that the dangers of misinformation are real. If it does not, social media will become an echo chamber for post-truth politics.

• This article was corrected on 16 November 2016. The reference in an early version to Google pointing to links from “whitelisted” news sites and using a ranking system to assess their quality, should have said Google News.