Ticket re-sale sites such as viagogo and Stubhub should face a tough new licensing regime which could see companies that break the rules shut down, the UK competition watchdog has said.

The Competition and Markets Authority (CMA) said it had taken strong action in recent years to protect customers but there was a limit to what regulators could do under present powers.

It said “swift and effective” action to tackle resellers who rip off or mislead sports and music fans was “not possible under the current law”.

The CMA said that with music festivals and large sporting events resuming over coming months it was recommending changes to the law and existing regulations to protect consumers.

They include a ban on platforms allowing resellers to sell more tickets for an event than they can legally obtain from the original seller.

The regulator also wants to ensure that these platforms are fully responsible for incorrect information about tickets that are listed for sale on their websites.

In a further recommendation, the CMA is calling for a new licensing system for secondary ticket platforms that would enable regulators to “act quickly and issue sanctions”.

These could include “taking down websites, withdrawing a business’s right to operate in the sector, and the imposition of substantial fines”.

The CMA said: “Whilst the bulk-buying of tickets ahead of real fans by professional resellers – who then sell them at inflated prices – may be illegal, swift and effective action by authorities is not possible under the current law.

“Similar issues arise in relation to laws which prevent resellers advertising tickets using incorrect information, or ‘speculatively selling’ tickets that they don’t own.”

In recent years the CMA has taken action against secondary ticketing websites for failing to provide important information to consumers.

That has included ordering viagogo and StubHub to remove misleading messaging about ticket availability, and to advise customers where tickets they buy might see them turned away at the door of a venue.

George Lusty, senior director for consumer protection at the CMA, said: “The secondary ticket websites are now worlds apart from those we saw before the CMA took action.

“While it is clear that concerns about the sector remain, there are limits to what the CMA and other enforcers can do with their current powers.

“With live music and sporting events starting back up we want the government to take action to strengthen the current laws and introduce a licensing regime for secondary ticketing platforms.

“If adopted, these proposals will help prevent people getting ripped off by unscrupulous resellers online and we stand ready to help the government to implement them.”

A viagogo spokesperson said: “We have argued strongly that the UK should grasp the opportunity of the COVID-19 recovery to improve the events industry and strengthen market collaboration between all players including event organisers, venues, primary and resale platforms.

“We are open to all ideas as to how that is achieved, but it must be carefully considered and focused on improving the industry’s service for customers.”