>> That's like saying social media shouldn't be allowed to compete with traditional news media.

Social media companies could be allowed to compete with traditional news media, if they were obliged to abide by the same standards, principles and legal regulations that apply to traditional news media companies.

In most EU countries, any newspaper spreading the kind of garbage you see on Facebook could (and probably would) be called to a public hearing in parliament and risk being shut down, and further legal action, if it was proven that it was publishing stories without doing proper due diligence.