The ticket resale website Viagogo is to be taken to court by the competition watchdog for alleged breaches of consumer law after refusing repeated requests to change its practices.
However, Viagogo declined to make changes, prompting the CMA to go to the high court in an attempt to compel it to do so.
The decision comes less than a week before one of the company’s senior executives is due to appear before the digital, culture, media and sport select committee.
The CMA cited a litany of practices it said were breaching the rights of consumers buying tickets for live events.
It said buyers were not being told there was a risk they might be turned away at the door because of restrictions on ticket resale and that they were not informed which seat they would get.
Viagogo was also misleading customers about the availability of tickets and their popularity, the CMA said, leading to consumers being rushed into buying.
The website was advertising tickets that sellers did not have and may not be able to supply, it added, and consumers often had difficulty getting their money back.
Lastly, the CMA said Viagogo was not telling consumers who they were buying from, in many cases professional ticket touts, denying them the legal rights afforded to those buying from a business.
The CMA said StubHub, a rival company, as well as the GetMeIn and Seatwave businesses due to be shut down by Ticketmaster, had agreed to comply with its demands. Viagogo is alleged to have refused to engage properly with the regulator’s concerns.
“Unfortunately, while other businesses have agreed to overhaul their sites to ensure they respect the law, Viagogo has not,” the CMA’s chief executive, Andrea Coscelli, said.
“We will now be pursuing action through the courts to ensure that they comply with the law.”
Viagogo said: “Having worked closely with the CMA for some time, we are disappointed with the announcement of formal action today. However we respect the CMA’s intentions and remain committed to reaching resolution through the legal process.”
The CMA is also seeking an interim order that would compel Viagogo to change its business practices until the case comes to trial. If a judge grants the order and Viagogo does not comply, it could face unlimited fines, while executives could be imprisoned for up to two years.
The Labour MP Sharon Hodgson said: “Perhaps Viagogo will now realise that consumer protection legislation passed by parliament is not a minor inconvenience to be ignored and that they can be held accountable through the courts.”
Practices such as selling tickets to buyers who were denied entry to events and leaving fans out of pocket by withholding refunds have caused anger. The company has also been condemned on multiple occasions for seeking to profit from events in aid of charity and for allowing touts to charge huge mark-ups to see acts such as Adele.
Fifa lodged a criminal complaint against Viagogo over unauthorised ticket sales for the World Cup in Russia earlier this year, while a Guardian investigation revealed the company was allowing touts to illegally resell football tickets.
Viagogo remains under investigation by National Trading Standards following a referral by the Advertising Standards Authority earlier this year over “misleading” pricing information.