In an interim report in its Disinformation and "fake news" inquiry, the government's Digital, Culture, Media and Sport Committee said the country was facing "a democratic crisis founded on the manipulation of personal data, and targeting pernicious views to users, particularly during elections and referenda".
The inquiry was undertaken in the wake of the Cambridge Analytica scandal – allegations that the company used data from millions of Facebook accounts to target voters in the US presidential election.
Damian Collins, MP and chair of the committee, said: "We are facing nothing less than a crisis in our democracy – based on the systematic manipulation of data to support the relentless targeting of citizens, without their consent, by campaigns of disinformation and messages of hate.
"Facebook failed to spot this at the time, and it was only discovered after repeated requests were made for them to look for evidence of this activity.
"Users were unaware that they were being targeted by political adverts from Russia, because they were made to look like they came from their own country, and there was no information available at all about the true identity of the advertiser."
Among the other interim recommendations of the panel is the imposition of a levy on tech companies to fund education and the Information Commissioners Office, changing the rules on political campaigning, an audit of fake accounts by the Competition and Market Authority, and a digital Atlantic charter to reassure users that their digital rights are protected.