The Office of Fair Trading hands the daily deals firm a new series of guidelines to follow.
Groupon has been making large movements in the mobile space recently, announcing a rollout into 30 new countries, purchasing geolocation and barcode mobile tech firms, as well as partnering Deutsche Telekom for a mobile deals service.
However, the UK Office of Fair Trading found that Groupon has been breaching consumer protection regulations, which span across pricing, advertising, refunds and unfair terms.
The OFT has insisted that Groupon changes its trading practices, which the daily deals firm has accepted, while OFT also notes that Groupon was fully compliant throughout the investigation.
Cavendish Elithorn, senior director in the OFT's goods and consumer group, said: "Collective buying and discount schemes can offer real benefits for both consumers and merchants. The market is growing rapidly, but it's important that consumers benefit from consumer protection law as well as from the discounted offers.
"Groupon has cooperated fully with our investigation and is making changes to its business practices to address our concerns. We will be monitoring the situation closely to ensure that consumers benefit from these improvements."
Groupon has three months to make the changes, which can be found here.