While prioritising the role of Facebook, Google and the tech industry, the trade body's submission also says that self-regulation schemes such as press watchdog IPSO, and the PRCA's own disciplinary procedures, have a role to play.
The PRCA's submission makes clear the view that legal regulation is not likely to achieve as much - but a spokesman for the organisation said it would take account of evidence provided by media law stakeholders.
"The recent phenomenon of fake news requires new forms of regulation, which is where technology companies can play a significant role. Companies like Facebook and Google have already made key changes in this area without compromising freedom of speech," it says.
Examples given by the PRCA are Google having banned a number of sites from using the '.co' as an attempt to mislead users into think they were another website with the '.com' domain, and having stopped certain websites from using is AdSense advertising tool. The PRCA also notes Facebook's decision to stop what it deems as fake news sites from using Audience Network Ads. Facebook has also revamped its 'Trending News' module as a result.
"Industry-led initiatives are key in the free market landscape to ensure the end user has confidence in the search engine or network they choose," the PRCA says.
PRCA director general Francis Ingham also says that education of the public is crucial. He said: "It is encouraging to see that several big players in the technology industry have begun to assess their editorial policies. We cannot - and should not - solely rely on algorithms to root out fake news.
"The public must be responsible for the spread of fake news, which is why education is key. Above all, we want to ensure that the public is properly informed on the news they read online, because this will ultimately lead to productive political engagement."
Other points made by the PRCA submission are that the low public trust in media is bad for the PR industry because it means that companies stand to gain less by appearing in that media, and that the inquiry's attempts to define fake news "should not be an exercise in undermining opinion articles".
The PRCA cites one example of its disciplinary procedures being used against a PR firm proliferating falsehoods: the 2015 affair which led to member agency Fuel PR being kicked out for using a fake case study in what became known as 'Sweaty-gate'.
The inquiry's deadline for submission was today (Friday). It will now examine the submission and arrange oral evidence hearings.
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