So what do people mean when they say this? The NPR piece says Smith suggests "the Internet giants will cannibalize the very fabric of this country". This metaphor seems hyperbolic as well. To use "cannibalize" means that something will eat itself. So, they Internet giants are the fabric of the country and they will eat the fabric. Something is missing there.
The next paragraph then negatively describes Smith's regret of his previous calls for deregulation. This seems firmly unrelated to democracy, as all forms of government have regulation, and regularly adjust regulation to get better effects. However, it does seem related to the power of government over organizations such as Microsoft. Is the "threat to democracy" really meant to indicate the loss of the power of the government over individuals relative to increases of power of other organizations?
"For one, he argues, it's time to reform the U.S. law that says Internet platforms are not liable for just about any of the content running through their pipes" This would dismantle the Internet. Did he forget to read https://www.amazon.com/Twenty-Six-Words-That-Created-Interne... ? It would force your ISP to become a censor. It's the complete opposite of the idea of moving power towards an elected government and away from corporations.
Anyway, I was worried for a bit reading the headline, but it looks like our elected government is safe for the time being and this is just more hyperbolic bullshit.
"No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."
-Section 230
[1] https://www.amazon.com/Twenty-Six-Words-That-Created-Interne...