Groupon, the group-buying discounting website, has been forced by the Office of Fair Trading (OFT) to change its trading methods after complaints about misleading ads and unfair practices.
The Advertising Standards Authority ruled that its promotions "breached consumer protection regulations" on a "widespread" basis.
Groupon has come under widespread criticism for exaggerating reductions on prices and failing to warn the companies providing its offers of how many customers they should expect.
The OFT also discovered it had not been diligent enough in checking discounts offered by merchants were genuine. In addition, the company failed to ensure merchants had enough of their products for the number of likely buyers.
Groupon has now agreed that it will ensure all prices, including savings, are "accurate, honest and transparent".
Other issues included Groupon's failure to comply with rules which allow customers buying most products online the right to cancel within 14 days of their order.