(Reuters) - Groupon Inc, which runs the world's largest online coupon site, has agreed to an $8.5 million settlement of litigation alleging that the expiration dates on its coupons are illegal.

The settlement resolves 17 lawsuits that were consolidated in a federal court in San Diego, where settlement papers were filed.

It addresses claims that the restrictions imposed on consumers by the Chicago-based company and various retailers it works with violated federal and state consumer protection laws.

(Reporting By Jonathan Stempel in New York; Editing by Gary Hill)