The Commerce Commission has told the High Court ticket reselling website Viagogo broke the law by selling tickets to the 2017 British and Irish Lion's tour.
Commission lawyer Nick Flanagan told the court the New Zealand Rugby Union has the exclusive right to sell tickets to rugby games.
He said it was not a right shared with the controversial ticket reseller, Viagogo.
In an email presented in court as evidence, the company alerted sellers to the rugby tour and told them it would be a popular event.
Mr Flanagan said the company broke the law by doing so.
"The British and Irish Lions tour was an event subject to the Major Events Management Act and it was illegal to sell tickets to it above face value. And its a given that sellers who are purchasing tickets for re-sale are going to do that, why else would they bother," Mr Flanagan said.
He told the court ticket scalping is a "significant issue" for New Zealand rugby.
"The week leading into the first test match of the 2018 Steinlager series, the Auckland Rugby Union informed us that over 300 children's tickets had been purchased by six individuals from Qatar and Russia. It's hard to imagine there are 300 children on their way from Qatar and Russia," Mr Flanagan said.
The Commerce Commission is seeking an interim injunction to stop the website from committing what it says are further breaches of the Fair Trading Act.
While an attempt to serve the injuction notice was made to the European company, it insisted it had to be served in its jurisdiction - not in New Zealand.
Until this morning, Viagogo was not expected to front at the hearing, but its lawyer Aaron Lloyd made an unexpected appearance on a "pickwick" basis - which means he will assist the court.
He fired back at the commission's claims.
"It's easy for the commission to try and put the boot into my client, with comments such as 'it's a marginal company' and the broad allegations that its successful business is based on the kinds of things that the commission is complaining about. But the reality is that the matter is a little bit more complex than that," Mr Lloyd said.
Among other allegations, the Commerce Commission said the website mislead customers over its ticket guarantees. Its lawyers told the court as a ticket re-seller, it could not guarantee tickets would be valid.
Mr Lloyd defended Viagogo's policy and made an analogy to a toaster.
"My friend seems to think that the guarantee is somehow amounting to an utter and absolute assurance a ticket will be available," Mr Lloyd said.
"When I buy a toaster, I get a guarantee it's going to work too but occassionally it fails. No one thinks that a guarantee is nessecarily an absolute and utter promise. And in fact, as my friend indicated, and to the terms and conditions on the Viagogo website, you see the guarantee is a guarantee that says this will happen and if it doesn't you'll get your money back."
Justice Patricia Courtney has reserved her decision.