The competition watchdog has told Stubhub, the ticketing resale website, that it could be taken to court if it does not stop misleading customers on its website.
The Competition and Markets Authority, which is investigating the $4 billion sale of Stubhub to Viagogo, said it was concerned that Stubhub was failing to warn people that tickets may not allow them into an event.
Stubhub was founded in San Francisco ten years ago by investment bankers Eric Baker and Jeff Fluhr who sold it to Ebay in 2006 for $310 million.
Mr Baker went on to found Viagogo, which launched a takeover of Stubhub last November after Ebay was forced into a sale by activist investors.
The regulator last year demanded that resale websites comply with laws designed to protect consumers but yesterday said it remained concerned that Stubhub was using misleading messages about ticket availability and failing to ensure people knew where they were sitting in a venue.
The authority said that if changes to Stubhub’s website were not made quickly or did not go far enough, it would take court action.
Andrea Coscelli, chief executive of the authority, said: “Stubhub had committed to make important changes to the information on its site, so anyone buying a ticket would know what they were getting before parting with their money. It’s unacceptable we have found these concerns. We have demanded swift action to resolve these problems and are pleased that Stubhub has said it will make changes in response.”
Last year it emerged that Stubhub and Viagogo had to tell hundreds of football fans who were travelling to Madrid for the Champions League final that their tickets did not exist.
The authority is continuing to monitor Viagogo after it threatened the site with contempt of court last year for ignoring repeated warnings to comply with customer law. It also has a separate investigation into its anticipated acquisition of Stubhub.
Viagogo and Stubhub have the lion’s share of the $16 billion annual online ticket market. Critics have called ticket resellers digital ticket touts while the singer Ed Sheeran has banned people with Viagogo tickets from his concerts.