US regulators have sued Ticketmaster and its parent company Live Nation, accusing the companies of employing illegal ticket resale tactics and costing consumers millions of dollars in the process.

The Federal Trade Commission, along with seven states, said the entertainment giant coordinated with brokers to buy concert tickets and ultimately sell those tickets at a “substantial” mark-up, profiting from huge resale fees.

The resale practices violated consumer protection law, the Federal Trade Commission (FTC) said.

Ticketmaster, which dominates the concert ticketing market, has faced backlash against its ticket prices for years. The FTC’s suit marks its latest hurdle.

Ticketmaster and Live Nation did not immediately respond to a request for comment on the FTC’s allegations.

Artists can set limits for how many tickets a buyer can purchase, but the FTC alleges the companies turned a blind eye when brokers – professional resellers, either individuals or firms – violated those limits.

It said that Live Nation and Ticketmaster allowed those “illegally obtained” tickets to be resold on the Ticketmaster platform, reaping in $3.7bn (£2.7bn) in resale fees between 2019 and 2024.

Ticketmaster has a popular resale function on its site and charges sellers a fee when a ticket is resold.

Ticketmaster profited from the allegedly illegal tactics and the “tacit agreement” with brokers, regulators said.

“American live entertainment is the best in the world and should be accessible to all of us,” FTC chair Andrew Ferguson said in a statement.

“It should not cost an arm and a leg to take the family to a baseball game or attend your favorite musician’s show.”

The FTC also accused Ticketmaster of deceptively advertising lower prices for tickets than what consumers actually pay.

Ticketmaster controls about 80% of all major concert venues’ ticket sales. It has faced intense scrutiny of its business practices since 2022, when it botched a rollout of tickets for Taylor Swift’s highly-anticipated Eras Tour.

Fans encountered website failures when they tried to buy tickets for Ms Swift’s US tour, bringing attention to the company’s influence over live entertainment events.

Live Nation Entertainment was created by the merger in 2010 of US-based events promoter Live Nation and ticket sales and distribution company Ticketmaster.

The US Department of Justice separately sued Live Nation last year, accusing it of using illegal tactics to maintain a monopoly over the live music industry. The lawsuit said the firm’s practices had stifled competitors, and led to higher ticket prices and worse service for customers.

At the time, former Attorney General Merrick Garland called on the courts to break up the company.

A judge earlier this year rejected Live Nation’s bid to dismiss the antitrust claims, which the company has called “absurd.”

Along with its subsidiary, Ticketmaster, Live Nation puts on concerts, sells tickets and owns venues, serving multiple roles that the Department of Justice said had turned it into a “gatekeeper” for the industry.