It's abundantly clear that markets aren't self-regulating. We need government regulation to counteract harmful actions of businesses.
The status quo is much more preferable to social networks and their shareholders, of course. Charging advertisers arbitrary amounts based on eyeball count no one can actually verify, while not having to worry about losing paying customers due to ignoring requests of locked-in users, is a nice position to be in.
To the point about market regulation, IMO there may be a place for a limited, surgically precise yet not targeting any specific companies intervention (for example, “you are obligated to provide an API covering the entirety of your GUI features if you serve more than N users”) that would, a few causal links down the line, break such shockingly dysfunctional customer-provider relationships, normalize paid social and let the market do its thing.
Either way, government is too blame. Both for not regulating these bad things away, and also for having some hand in causing them N-levels back (you just can't see or prove this one easily). It's a nice sweet spot for governments and their officials and advocates, because they can always absolve themselves by blaming the free-market in one way or another. They do too much or do the wrong regulation, causing something "bad" in the market, and boom they blame "the market". Likewise, they put some half-assed regulations that don't do much and yet again they blame "not enough regulation". The entire thing is ridiculously circular and self-reinforcing. Almost as if it's been designed for argumentative deadlock.