"The crisis for democracy posed by digital disinformation demands a new social contract for the internet rooted in transparency, privacy, and competition," declares a new report that challenges the overwhelming power wielded by large tech firms and the online platforms they now control.

"Now, we have dominant market players that have built the most valuable companies in the world, and yet they still operate largely without the oversight of public government."

—report

Published by the Washington, D.C.-based think tank New America—and building on a previous paper titled Digital Deceit—the new report by Dipayan Ghosh of the Shorenstein Center on Media, Politics and Public Policy and Ben Scott of the Omidyar Network argues that "as a democratic society, we must intervene to steer the power and promise of technology to benefit the many rather than the few."

The intervention they propose in Digital Deceit II is not small. As Ghosh told the Wall Street Journal, "We need to completely reorganize the way that industry works."

"For two decades, public policy has taken a hands-off approach to these new markets, believing that regulation might blunt innovation before these technologies reached maturity," the report explains. "Now, we have dominant market players that have built the most valuable companies in the world, and yet they still operate largely without the oversight of public government."

Considering that "the companies that control this market are among the most powerful and valuable the world has ever seen," it notes, "we cannot expect them to regulate themselves."

Collectively presented as a "digital social contract," the report's proposed federal regulations fall into three categories—transparency, privacy, and competition—and are "designed to foster open digital markets while protecting against clear public harms and supporting democratic values."

To promote more disclosures regarding the forces that use social media in hopes of influencing public opinion, they call for:

Real-time and archived information about targeted political advertising;

Clear accountability for the social impact of automated decision-making; and

Explicit indicators for the presence of non-human accounts in digital media.

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To safeguard consumer privacy and promote users having more control over personal data, they suggest:

Consumer control over data through stronger rights to access and removal;

Transparency for the user of the full extent of data usage and meaningful consent; and

Stronger enforcement with resources and authority for agency rule-making.

To ensure that consumers "have meaningful options to find, send, and receive information over digital media," they recommend:

Stronger oversight of mergers and acquisitions;

Antitrust reform including new enforcement regimes, levies, and essential services regulation; and

Robust data portability and interoperability between services.

Recent state-level action and polling show that the American public supports stricter regulations for tech firms. In June, Pew found that the majority of Americans "believe these companies should be regulated more than they are now." That same month, California lawmakers passed legislation that led some to conclude that the state "could be the bellwether for the privacy movement."

Ghosh and Scott recognize the California measure was "watered down after interest lobbying," but assert in the new report that as "the most protective privacy standard anywhere in the United States," the law deserves "recognition as the starting point for a path forward at the national level."

Pointing to their January paper and changes to data collection and advertising standards that tech companies have announced in recent months, Ghosh—who previously worked as a White House technology adviser under former President Barack Obama—told the Journal he doesn't believe that major firms will go far enough to protect consumers unless they are forced to by federal regulatory action.

"I think we both felt at the beginning of the year, there was potential to talk to the industry," Ghosh said, referring to his co-author. "We are increasingly disillusioned now."

Meanwhile, the Republican-controlled Congress appears inclined to only hear the recommendations from the tech industry. Representatives for Apple, AT&T, Amazon, Charter Communications, Google, and Twitter are slated to testify Wednesday for the Senate Committee on Commerce, Science, and Transportation about protecting users' data. Despite outcry that corporate interests will dominate the hearing and demands that Sen. John Thune (R-S.D.), the committee chairman, also invite the nation's leading consumer advocacy groups to attend, the witness list has not changed.