Social media companies must simplify the conditions of using their services because they are so impenetrable that "no reasonable person" can be expected to understand them, MPs have said.
Complicated terms and conditions that allow firms like Facebook access to a wealth of personal information and even control a user's phone are drafted for use in American court rooms, according to the science and technology committee.
It called for the Government to draw up new guidelines for websites and apps to sign up to that commit them to explaining clearly how they use personal data, warning that laws will be needed if companies fail to comply.
The committee highlighted terms for Facebook Messenger's mobile app, used by more than 200,000 million people a month, that means it can gain direct access to a mobile or tablet, including to take pictures or make videos, at any time without explicit confirmation from the owner.
MPs also pointed to criticism of the company earlier this year after it carried out a psychological experiment that recorded users' moods as news feeds on the social network were manipulated.
Andrew Miller, who chairs the science and technology committee, said: "Facebook's experiment with users' emotions highlighted serious concerns about the extent to which, ticking the terms and conditions box, can be said to constitute informed consent when it comes to the varied ways data is now being used by many websites and apps."
"Let's face it, most people click yes to terms and conditions contracts without reading them, because they are often laughably long and written in the kind of legalese you need a law degree from the USA to understand.
"Socially responsible companies wouldn't want to bamboozle their users, of course, so we are sure most social media developers will be happy to sign up to the new guidelines on clear communication and informed consent that we are asking the Government to draw up."
He added : "A line also needs to be drawn between the information that apps actually need to provide a service and the kind of personal information they often request when registering new users, information that is becoming increasingly valuable in our networked society.
"I hope that a voluntary system of guidelines can work, because, if not, legislation might be needed."
The committee also criticised the Government's handling of plans to compile patients' medical records on a centralised database under the controversial care.data project, which sparked concerns from patients' rights groups and doctors over privacy.
It said the project was "a clear example where this trusted relationship failed to develop".
Mr Miller said: "Whilst we expect the Government to be encouraging others to meet high standards, we also want to see it lead by example. The Government cannot dictate to others, when its own services - like care.data piloted by the NHS, have been found to be less than adequate.
"The Government must audit all public sector online services and ensure that they provide easy to understand information about their usage of personal data."