Big technology companies can start to fix the problems they've created by making the user the customer — like Netflix did, technology pioneer Jaron Lanier told CNBC on Friday.

"What we have to do is change the business model so they become more like real businesses where the user is also the customer," Lanier, an interdisciplinary scientist at Microsoft, said on CNBC's "Squawk Alley." "We need to go through that transition to clear the trash out of the internet."

Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg are both expected to attend a hearing next week by the Senate Select Committee on Intelligence to address the issue of Russian meddling in the 2016 presidential election and how to proceed as the November midterm elections draw near. Google CEO Sundar Pichai is not expected to attend.

Big technology companies have been under scrutiny as they attempt to strike a balance between allowing freedom of speech on their platforms and preventing abuse by bad actors. Google's parent, Alphabet, along with Twitter and Facebook, earlier this month removed accounts tied to Russian and Iranian propaganda efforts. Earlier this year, 13 Russians were indicted for attempting to interfere in the U.S. presidential election. Meanwhile, President Donald Trump has doubled down on threats against Facebook, Google and Twitter for what he perceives to be anti-conservative bias.

Silicon Valley veteran Lanier, a computer scientist and staunch critic of social media, says companies such as Facebook and Google brought these problems on themselves with their ad-based, data-driven business models.

"As long as that's the business model, of course you undermine the ability to create brands that enforce quality, because it's all about manipulation," Lanier said. "Then you create all the incentive in the world for that cranky, paranoid stuff that has taken over."

By the same token, those institutions that traditionally upheld standards of truth and quality have been radically undermined as big technology takes an ever-growing share of users' media consumption, Jaron said.

"The companies brought this on themselves. When Facebook had a slogan saying, 'Move fast and break things,' the stuff that they broke was institutions, like ... journalistic entities that would maintain quality," Lanier said.

In order to fix what's been broken, Lanier said technology companies can start by fixing their business models. They would do well to follow in the footsteps of Netflix and make the user the customer, instead of prioritizing advertisers.

"It works. Netflix proved it works. We used to think, 'Oh, nobody will ever pay for a movie online, because you can get them for free.' But actually, if you're willing to pay for them, they get better. You get peak TV," Lanier said.

The idea that technology companies will somehow be able to tell users what they can and can't say, and who can hear what, will never work, Lanier warned, "no matter how smart and well-intentioned."

"What we have to do is fix the things that we broke ... so that the tech companies aren't in this position of being arbiters for all society and civilization. It's a terrible role. Nobody wants them to have it; they don't want it," Lanier said.