I'm not up to date on laws and regulations. I heard a story in the last month on NPR about how the laws licensing and regulating news services were changed and this allowed FOX News to become a reality.
As it is if extremists from either side want content that is biased there should be an entrepreneur start up a new platform that will allow the content they want. The problem with social media companies is that they sell advertising (Capitalism at work) and to make more money you need to appeal to the vast majority of users. The fringe will turn off a huge segment of populations and the profits will not be impressive. As corporations the board of directors will want more profits and demand policies that will open the platforms to more users, thus less obscene content. This means the fringe will be weeded out yet again. Parler didn't make it because they wanted profits. We will see if trump's platform will work, but so far it's fallen flat. Democracy and Capitalism seems to favor more reasonable content on popular platforms. hat's not to say I agree with how social media does it's work in policing content.
I'm seldom on Facebook anymore because it is mostly garbage at this point. I see many folks being banned for rather innocuous posts while people firmly rooted in fake news proliferate like poison ivy. I've been banned for making liberal jokes, I defended myself several times and was reinstated, so I understand how the algorithms react, but don't assess. Given my liberal jokes it makes me suspect that the people who reported me were conservative users. So a bit of irony about cancel culture and bans on content they don't like. I would suggest that if conservatives don't want social media to censor content then they will have to endure the push back, especially on political issues where their candidates have serious ethical concerns.
You make some good, well-reasoned arguments, although even under our capitalist system, there are antitrust regulations and laws against collusion, price-fixing, discrimination, and other such rules and regulations depending on which industry we're talking about. If we were talking about a truly open market which was free and fair to all, then it would be truly democratic and a matter of the people's choice.
But it's never quite simple as that. Capitalism is somewhat predatory where the big fish are given license to eat the little fish, such as exemplified by the Walmart effect of putting local, mom-and-pop stores out of business because they just couldn't compete with the big box stores. That may be considered "fair play" under the capitalist system, but it still leaves a lingering bitter taste among the body politic.
And of course, with public utilities, they have to be regulated and overseen by a state commission to prevent any monopolistic abuses. TV and radio are in a different category, as they're not public utilities, but they're regulated because the airwaves are considered public property.
The internet seems a different kettle of fish, and perhaps it's still relatively "too new" to be able to flesh out all the legalities and responsibilities of both government regulators and private businesses. The internet started out as public property, but now many seem to think that it's a private enterprise that should only be available to those with the wealth and resources to exploit it. As you say, anybody can start up their own social media company and take their chances in the marketplace, and no doubt many have tried. I'm recalling the infamous "Dot.Com" bubble burst many years ago.
The only thing I ever do is post to message boards like this one. I don't have a Facebook account, and I'm not a YouTube content producer. I don't have my own website or blog - so I really don't have any dog in this fight one way or the other. I do have a Twitter account and get Tweets from local law enforcement and local news, but I've never once tweeted anything myself.
I have no idea what it would take to start up a company like Parler or Twitter or any of that. I don't know what their financials look like, so I can't tell whether controlling or banning certain kinds of content (or failing to do so) has any appreciable effect on their bottom line or profit margins.
As far as the public clamor over offensive content might be a factor, that also may not be quite so black-and-white. Film, TV, and music industries have taken a lot of heat from the public over some of the content they've produced, yet they've been willing to take that heat - even if it may have affected their bottom line. But they also got a lot of support. Back when Tipper Gore wanted to ban offensive rock lyrics, there was a public backlash from people who didn't like the direction that was going.
Some consumers of media would prefer that media outlets be more open, even if it means allowing offensive content - and let the viewers decide for themselves whether they like it or not. That's capitalism, too.
On a more personal note, I find myself feeling resentful anytime I see where something has been deleted or where something has been denied access for public viewing. It's an insult to believe that I'm not able to handle it or that I would need to be "protected" from whatever content there might be.