Social media firms are "shamefully far" from tackling illegal and dangerous content, says a parliamentary report.
Hate speech, terror recruitment videos and sexual images of children all took too long to be removed, said the Home Affairs Select Committee report.
The government should consider making the sites help pay to police content, it said.
But a former Facebook executive told the BBC the report "bashes companies" but offers few real solutions.
The cross-party committee took evidence from Facebook, Twitter and Google, the parent company of YouTube, for its report.
It said they had made efforts to tackle abuse and extremism on their platforms, but "nowhere near enough is being done".
The committee said it had found "repeated examples of social media companies failing to remove illegal content when asked to do so".
It said the largest firms were "big enough, rich enough and clever enough" to sort the problem out, and that it was "shameful" that they had failed to use the same ingenuity to protect public safety as they had to protect their own income.
"White Genocide" and "Ban Islam"
Among the examples the committee found were:
- Twitter refused to remove a cartoon depicting male ethnic minority migrants abusing a semi-naked white woman while stabbing her baby to death on the grounds it was not in breach of its "hateful conduct policy"
- YouTube refused to remove a video entitled "Jews admit organizing White Genocide" on the basis it "did not cross the line into hate speech"
- On Facebook there were openly anti-Semitic and Islamophobic community pages such as "Ban Islam". Facebook removed some posts but not the community pages themselves because its policy allows criticism of religion, but not hate against people because of their religion
The MPs said it was "unacceptable" that social media companies relied on users to report content, saying they were "outsourcing" the role "at zero expense".
Yet the companies expected the police - funded by the taxpayer - to bear the costs of keeping them clean of extremism.
The report's recommendations include:
- The government should consult on requiring social media firms to contribute to the cost of the police's counter-terrorism internet referral unit
- It should also consult on "meaningful fines" for companies which failed to remove illegal content within a strict timeframe, highlighting proposals in Germany which could see firms fined up to £44m and individual executives £5m
- Social media companies review urgently their community standards and how they are being interpreted and implemented
"Social media companies' failure to deal with illegal and dangerous material online is a disgrace," said committee chairwoman Yvette Cooper.
Ms Cooper said the committee's inquiry into hate crime more broadly was curtailed when the general election was called and their recommendations had to be limited to dealing with social media companies and online hate.
Home Secretary Amber Rudd said she expected to see social media companies take "early and effective action" and promised to study the committee's recommendations.
In a statement Simon Milner, Facebook's policy director, said: "We agree with the Committee that there is more we can do to disrupt people wanting to spread hate and extremism online."
He said the social network was working with King's College, London and the Institute for Strategic Dialogue to make its efforts to curb hate speech more effective.
Mr Milner added that Facebook had developed "quick and easy ways" for people to report content so it could be reviewed and, if necessary, removed.
"We take this issue very seriously," a spokesman for Google said, adding that the firm would continue to address "these challenging and complex problems".
"We've recently tightened our advertising policies and enforcement; made algorithmic updates; and are expanding our partnerships with specialist organisations working in this field."
Twitter has not yet responded to a BBC request for comment.
The firms had previously told the committee that they worked hard to make sure freedom of expression was protected within the law.
A former European policy manager for Facebook, Luc Delany, told BBC Radio Four's Today programme the report had failed to look at more than a decade of work the industry had done with police and successive governments on the problem.
He said: "It bashes companies and gets a few big headlines for the committee but the solutions proposed don't really play out in reality."
However, committee member and Labour MP Naz Shah disagreed: "It's not headline-grabbing when people are making money off terrorist content, headline grabbing when we've got child abuse online.
"Not working fast enough is not acceptable to the committee, to myself or anybody quite frankly."
Ms Shah suggested that internet companies giving money to the Met's counter-terrorism unit would be similar to football clubs contributing to the cost of policing matches.
But Mr Delany rejected this, adding a football stadium was a "fixed place" with "one obvious and historic type of behaviour" whereas social media companies had hundreds of millions of users and hours of content.
The child protection charity NSPCC has also called for fines for social networks that fail to protect children.
Internet companies' voluntary regulations on child protection are "not up to scratch", the charity's chief executive, Peter Wanless, said last week.