The competition watchdog is to take legal action to have the ticket resale website Viagogo found in contempt of court over its controversial business practices, in a move that could result in the company being fined or directors facing prison.

The Competition and Markets Authority said Viagogo had not fully complied with the terms of a court order designed to protect consumers, despite being given a grace period to do so.

The terms of the order included a requirement to display information such as whether ticket buyers could be turned away at the door despite often paying well above face value through the site, which is used by some of the UK’s most powerful touts to sell tickets to in-demand events.

“The CMA has today warned Viagogo it is still not compliant with the court order we secured, requiring improved information be displayed about the tickets listed for resale on its site,” a spokesperson said.

“Although some improvements have been made since we first demanded action to address areas of non-compliance, further checks have shown there are still issues of concern.

“For a company not to comply with a court order is clearly very serious. We are therefore now preparing to take legal action to ask a court to find Viagogo in contempt.”

A contempt of court ruling could result in the company being fined or even the imprisonment of directors.

Viagogo said: “We take the CMA’s concerns very seriously. However, we strongly believe we are not in breach of the court order.”

The CMA warned in January that it still had “serious concerns” about Viagogo’s alleged lack of compliance.

It followed a landmark legal victory over Viagogo that forced the site to give consumers more information about what they are buying, including the identity of touts advertising tickets.

Under the court order, described by the digital minister Margot James as a “great victory for consumers”, Viagogo was told to inform buyers if there was a risk that they could be turned away at the door due to restrictions on resale imposed by promoters.

Ticket listings must also include the identity of the person selling the tickets and whether they are a professional tout, rather than a fan who can no longer attend a show and wants to recoup the face value of the ticket.

Information disclosed as a result of the order revealed the extent of the grip on in-demand events wielded at the expense of fans by ticket touts, who use Viagogo to sell tickets at vast mark-ups.

Scrutiny of Viagogo has intensified in the light of a string of high-profile incidents, such as the resale of tickets for charity events, fans struggling to secure refunds after being turned away from events and revelations about the company’s resale of football tickets, which is against the law in the UK.