This should apply to more than FB or social media, but also to news outlets and anyone generally using algos to create feeds which impact human perceptions and decision making.
I don't think the government is up to the task for creating an effective regulatory body, or that a govt run regulatory body would be effective. An interesting alternative I came across (more generally) is for the government to authorize private regulators and let them compete for best outcomes. How this avoids the DC funding loop, I'm not sure...