By Ryan Tracy and Brent Kendall

WASHINGTON -- The Justice Department submitted a proposal to Congress on Wednesday to curb longstanding legal protections for internet companies such as Facebook Inc., Alphabet Inc.'s Google and Twitter Inc. and force them to shoulder more responsibility for managing content on their sites.

The proposal advances two main goals the Trump administration and the department outlined in June: encouraging online platforms to actively address illicit conduct and manage content on their sites in fair and consistent ways.

The department refined its proposal in the intervening months based on feedback from market participants and other stakeholders such as victims' rights groups. As a result of that process, the department made some changes, including clarifying that internet companies would have immunity when they take down material that promotes violent extremism or self-harm, a senior department official said.

President Trump, discussing social media companies at a White House meeting Wednesday with Republican state attorneys general, described the proposal as part of a series of "concrete legal steps to protect an open internet and a free society." At issue is Section 230 of the Communications Decency Act of 1996, which gives internet platforms broad latitude to police their sites and shields them from legal liability related to users' actions, except in relatively narrow circumstances.

Mr. Trump also injected an element of election-year politics over social-media companies' handling of posts from conservatives and from him, some of which have been removed or labeled as misleading after they were deemed to violate the platforms' policies. "We are watching them very closely during this election cycle," he added.

Sen. Ron Wyden (D., Ore.), who helped write the legal protections targeted by the administration's proposal, said Republicans are trying to "work the refs ahead of the election" by threatening social media companies with retribution if they censor or fact-check content. The legislative proposal is "a warmed-over mishmash of existing Republican proposals to force private companies to host lies, misinformation, hate speech and other slime online," he said in a statement.

While the legislation is unlikely to pass during a busy and contentious election year, Congress could take up the proposal or others like it next year. Both Democrats and Republicans say they want to review the legal protections internet companies enjoy, though they have differing concerns. Democratic presidential candidate Joe Biden called in January for revoking Section 230 altogether, though he hasn't outlined if or how he would replace it. He says platforms need to do more to curb the spread of false information.

Attorney General William Barr, seated next to the president Wednesday, urged the state law-enforcement officials to investigate whether social media platforms deceive users, even if federal law doesn't change. "When they engage in unfair and deceptive practices, state AGs can be the tip of the spear," he said.

The tech industry has opposed efforts to change or repeal Section 230, saying it has enabled internet platforms to blossom without fear of excessive lawsuits.

"Good-faith moderation efforts that remove things like misinformation, platform manipulation, and cyberbullying would all result in lawsuits under this proposal," said a statement Wednesday from Elizabeth Banker, deputy general counsel for the Internet Association trade group, whose members include Facebook, Twitter and others. "Even commenting on another individual's post could open an online forum or individual to a flood of litigation."

The proposal would remove Section 230 legal immunity when online platforms don't live up to certain standards. For example, they could lose legal protections if they facilitate criminal activity or know of unlawful conduct but don't restrict and report it. They could also face liability if they don't spell out content-moderation practices and follow them consistently, including by explaining the basis for decisions to restrict users' access.

The proposal also wouldn't confer immunity to platforms in cases of online child exploitation and sexual abuse, terrorism or cyberstalking. Those carve-outs are needed to allow victims to seek redress, the department has said.

Mr. Wyden has been less open to reviewing Section 230 than some other Democrats, including Mr. Biden and House Speaker Nancy Pelosi, who said in a New York Times interview this week that House Democrats were looking at Section 230 legislation. Representatives of the Biden campaign and Mrs. Pelosi had no immediate comment on the Trump administration's proposal.

Rep. Jan Schakowsky (D., Ill.), chair of a House subcommittee with jurisdiction over the issue, said the administration "has properly diagnosed the illness, but its prescription is lacking."

The proposal appeared aimed at winning support from Republicans on Capitol Hill, since it included aspects of previous GOP proposals, including one from Sen. Marsha Blackburn (R., Tenn.). In an op-ed in the Washington Examiner Wednesday, Ms. Blackburn wrote: "The social chaos that pervades today's online world is no longer compatible with a standard that unintentionally insulates content moderators from accountability for censoring speech they 'personally object' to. The only way to break this cycle is to update Section 230's standards to reflect 2020's realities."

Tech companies, which came under intense scrutiny over how Russian actors used their platforms to spread misinformation before and after the 2016 U.S. presidential election, say they don't manage content based on political considerations. This year social-media companies have shifted from a hands-off approach to a more active one toward Mr. Trump's conduct on social media. Twitter in May applied a fact-checking notice to a post about voter fraud by the president, a first.

Days later Twitter attached a notice to another post by Mr. Trump about violent protests in Minneapolis in response to the killing of George Floyd while in police custody. The post violated the company's rules about glorifying violence, the notice said.

Facebook left untouched a similar post about the protests, calling it political speech, but later clashed with Mr. Trump when it removed some Trump campaign ads and some of the president's statements about the coronavirus.

Days after Twitter's move in May, Mr. Trump signed an executive order pushing federal agencies to take a more active role in regulating how online platforms police content. The tech industry has said the move would exceed the agencies' authority under current law. The Federal Communications Commission is reviewing public comments on that initiative.

Separate from the debate over Section 230, large tech companies are also facing scrutiny in Washington over their market power. The Trump administration is pursuing antitrust investigations into Google and Facebook, which could result in lawsuits this year.

The administration's moves to target Section 230 don't have direct consequences for social-media companies in the near term. However, the actions raise the odds of a future crackdown while also casting Mr. Trump as a defender of conservatives against tech firms that Republicans say operate with a liberal bias.

"Online censorship goes far beyond the issue of free speech. It's also one of protecting consumers and ensuring they are informed of their rights and resources to fight back under the law," White House spokesman Judd Deere said before the president's Wednesday meeting with Republican state attorneys general. "State attorneys general are on the front lines of this issue, and President Trump wants to hear their perspectives."

Members of Congress have proposed their own ideas to narrow tech firms' legal immunity. A bill introduced earlier this month by Republican senators including Ms. Blackburn seeks to restrict companies from claiming immunity because they deemed content "objectionable," requiring them to instead meet a more specific standard. The Justice Department's proposal has a similar provision.

Another bipartisan proposal, termed the "EARN IT Act," could open the companies up to lawsuits from survivors of online abuse by giving the victims legal recourse if the companies don't "earn" Section 230 immunity by following reasonable practices for dealing with harmful content.

Democrats, for their part, say GOP accusations of political bias by tech companies are unfounded, pointing out that conservative content is widely shared on Facebook, Twitter, and other platforms. But they agree Section 230 needs review, and top Democrats on Capitol Hill have said they plan to discuss the matter in the coming months.

Alex Leary contributed to this article.

Write to Ryan Tracy at ryan.tracy@wsj.com and Brent Kendall at brent.kendall@wsj.com