UK lawmakers have called on the government to take action “without delay” to regulate social media, in a bid to tackle misinformation online.

The House of Lords Committee on Democracy and Digital Technologies reported on Monday that a “pandemic of misinformation” poses an existential threat to democracy, and that companies like Facebook and Google need to be held accountable.

The list of reforms set out by the committee included tighter regulation for political advertising to ensure it is brought into line with other forms of advertising in requirements for truth and accuracy.

Working with the Advertising Standards Authority, political parties should develop a code of conduct to ban inaccurate ads during times of elections and referendums, it said. Wildly inaccurate claims made by the Leave campaign, including that the NHS would receive an extra £350m per week if Britain left the EU, are believed to have influenced many to vote Brexit.

There should also be more transparency around who pays for specific political ads and beefed up powers for the Electoral Commission to fine £500,000 or 4% of total campaign spend for those breaking the rules.

The Lords also called on the government to push ahead with an online harms bill which would give regulator Ofcom the power to hold platform providers legally responsible for content produced by individuals with large numbers of followers. The regulator should be given powers to fine such companies 4% of global annual turnover or force ISPs to block serial offenders.

Ofcom should also be given the power to ensure online firms are transparent in how their algorithms work so they are not operating in a discriminatory manner, the committee said.

An independent ombudsman should be appointed to provide a point of contact for individuals to complain to in the event they feel let down by digital platforms.

Committee chair and Labour peer, David Puttnam, argued that the perils of misinformation have become clear during the COVID-19 crisis.

“We have set out a program for change that, taken as a whole, can allow our democratic institutions to wrestle power back from unaccountable corporations and begin the slow process of restoring trust,” he added.

“Technology is not a force of nature and can be harnessed for the public good. The time to do so is now.”

Catherine Stihler, chief executive of the Open Knowledge Foundation, argued that the only way to fight misinformation and disinformation is to make information open, so authorities like journalists and scientists can report the facts.

“Tech giants have a responsibility to increase transparency and work closely with fact checkers, but self-regulation is never going to be enough by itself – government intervention is required,” she added.

“The UK government should take account of public opinion and the recommendations in this report and work towards a future that is fair, free and open.”