"One of the dangers of the internet is that people can have entirely different realities," he told the prince, who was guest editing BBC Radio 4's Today programme.
"They can be cocooned in information that reinforces their current biases. Things aren't as simple as they've been portrayed in whatever chat room you've been in," he added.
"The question has to do with how do we harness this technology in a way that allows a multiplicity of voices, allows a diversity of views, but doesn't lead to a Balkanisation of society and allows ways of finding common ground."
The interview was recorded in Toronto, Canada, in September on the sidelines of the Invictus Games, the athletic tournament created by Harry for wounded former soldiers.
Despite admitting concern over the future of the US, Obama, who did not mention his successor Donald Trump by name, said he felt a sense of "serenity" on leaving the White House.
"There was a sense that we had run a good race," he added.
On his new routine, Obama told the prince: "I wake up later, it's wonderful to be able to control your day."
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