Facebook and Google are "making profits" on the back of prostitution and human trafficking, according to the National Crime Agency.
It says vulnerable women forced to work in pop-up brothels are being pimped online via the world's biggest Internet platforms.
The Sunday Times reported finding three sex clubs around Hyde Park, central London, and that similar pop-up brothels had been found from Cornwall to the Peak District.
Will Kerr, the NCA's head of vulnerabilities, said: "People are using the internet and social media sites to enable sexual exploitation and trafficking.
"It is clear that the internet platforms which host and make a profit out of this type of material need to do more to identify and stop these forms of exploitation."
Now the government is looking at laws that make the Internet company responsible for content published on their platforms.
"As the hosts of user-generated content, internet companies can and should be doing more to prevent trafficking-related material from appearing on their platforms," Downing Street said in a statement.
In the US, a bill is being pushed through Congress targeting Internet firm who "knowingly assist, support or facilitate" content that leads to trafficking.
The US legal effort was sparked by a site called Backpage.com which was packed with sex ads, many of them trafficked women or teenage runaways.