The US Federal Trade Commission and seven states sued Live Nation Entertainment Inc. and its Ticketmaster subsidiary for failing to stem the use of automated ticketing bots and large-scale resale operations in a lawsuit that could see the ticketing giant face billions of dollars in penalties.

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 FTC says Ticketmaster is also aware of ticket brokers regularly bypassing security measures by creating accounts using proxy IP addresses and, beyond that, offers tech support to brokers through ...