- Associated Press - Thursday, March 6, 2014

PLEASANTON, Calif. (AP) - Prosecutors in Northern California say Safeway has agreed to pay $2.25 million to settle a lawsuit alleging that the grocer engaged in false advertising, unfair competition and violated a 2008 injunction.

Under the deal, the Pleasanton-based supermarket chain does not admit liability, but it is bound by a permanent injunction barring it from making false or misleading statements, charging more than the lowest posted price and failing to honor valid coupons, discounts or offers.

Safeway has also agreed to take certain measures including adding more signs to notify consumers of its price-accuracy policy and hiring an independent auditor to conduct annual reviews.

Thursday’s settlement comes on the same day that Safeway and Albertsons announced a merger of two of the nation’s biggest supermarket chains valued at more than $9 billion.

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