Will California expand its century-old antitrust law?

A bill working its way through the Legislature has the potential to significantly expand California’s landmark antitrust law, providing a major update to over 100 years of antitrust framework at the state level.

The bill, AB 1776 or the COMPETE Act, authored by Assemblymember Cecilia Aguiar Curry (D-Winters), looks to make single-firm companies liable for anticompetitive business conduct under the Cartwright Act, California’s primary antitrust law since 1907. Such conduct includes unreasonable restraints of trade and forming and maintaining monopolies or monopsonies. Currently, the Cartwright Act only applies to conduct between two or more firms and primarily addresses practices such as bid-rigging, price-fixing and market allocation.

AB 1776 follows 2025’s AB 325, also authored by Aguiar Curry, which addresses shared pricing algorithms and went into effect on January 1.

The recent focus on antitrust legislation has coincided with rapid changes to California’s economy, characterized by increasing market consolidation and the rise of single companies that are able to control an entire market, particularly in industries such as tech, healthcare and retail.

A coalition of business trade groups, led by the California Chamber of Commerce, has expressed concern over the bill’s potential legal uncertainty and its economic effects for businesses and consumers.

“We have never had a bill that has had this much opposition this early in the process,” Ben Golombek, California Chamber of Commerce Executive Vice President and Chief of Staff for Policy, said. “We had over 120 groups [in opposition], and that was from every industry, every sector, big businesses, small businesses.”

The bill has conversely drawn considerable support from a coalition of consumer advocates, labor organizations and small business trade organizations, who argue that the current lack of state legislation to combat single-firm monopolies curbs workers’ rights, impairs small business and raises prices for consumers.

“We have never had a bill that has had this much opposition this early in the process….We had over 120 groups [in opposition], and that was from every industry, every sector, big businesses, small businesses.”

“[AB 1776] helps working people,” said Lorena Gonzalez, President of the California Federation of Labor Unions. “[Monopolies] not only suppress wages because they’re able to monopolize a space as a single employer, but they also cost American families real money. They’re able to manipulate the market, they’re able to become the cost driver of inflation. For both an affordability issue as well as a wages for workers issue, this extends to working people in a lot of ways.”

Aguiar Curry introduced the bill after the California Law Revision Commission conducted a three-year review of California’s antitrust laws and recommended that the Cartwright Act be updated to include single-firm conduct. In its review, the CLRC confirmed both that the Cartwright Act only applies to multi-firm conduct, and that federal antitrust law does not adequately address single-firm conduct in conjunction with the state’s broader antitrust legislature.

While the Sherman Act, the country’s primary antitrust statute, addresses unilateral anticompetitive conduct, AB 1776 looks to be more expansive in its reach and covers conduct that is difficult to prosecute under stricter federal guidelines. According to proponents of the bill, AB 1776 would be far more preventative in its effects than a case prosecuted under the Sherman Act.

“Over the past few decades, federal case law has evolved to address harm after the fact, which doesn’t protect small businesses,” Aguiar-Curry said. “Once a business shuts down, you can’t just flip a switch and bring those jobs back to the community. The damage is already done.”

As such, AB 1776 further establishes a decoupling of California and federal courts. The bill specifies that the validity of state claims should not be determined based on federal doctrine unless it is also consistent with AB 1776. Additionally, the bill states that “interpretations of federal antitrust laws are at most instructive, not conclusive” in state antitrust cases and advises courts to “liberally interpret California antitrust laws.”

Although the Cartwright Act is independent from the Sherman Act, state antitrust cases have historically looked to federal cases for precedent in determining anticompetitive conduct. While plaintiffs must still prove market power and harm to competition under AB 1776, the bill emphasizes that the standards for doing so do not need to follow federal doctrine, which could effectively lower the barrier of entry for state antitrust cases to make it to court.

Golombek expressed concern that this language within the bill could provide unseen legal liability for businesses.

“The lack of definitions in the bill, … combined with the throwing out of more than 100 years of legal precedence, provides no guidance to businesses or the courts in terms of what’s legal, what’s illegal, and how businesses should conduct their daily operations,” Golombek said.

But Gonzalez maintained that AB 1776 upholds the same intentions as current antitrust legislation and is simply preventing large corporations from working around the law.

“The larger businesses know exactly what they’re doing. They understand market forces, they understand when they’re manipulating market forces and why. To ask people to operate both in the letter of the law, but [also] the spirit of the law … is not asking too much,” she said. “They have attorneys, they know what’s acceptable behavior and what’s not. They’re just looking for loopholes, and we’re looking to close those loopholes.”

“The larger businesses know exactly what they’re doing. They understand market forces, they understand when they’re manipulating market forces and why. To ask people to operate both in the letter of the law, but [also] the spirit of the law … is not asking too much

Language within the bill aims to narrow its impact to the scope of anticompetitive monopolies. This includes a carve-out for small businesses, meaning businesses that comprise of 100 employees or less and have a maximum average annual gross receipt of $10 million over the three years prior to filing a complaint are exempt. The bill also protects entities acting within a contract, franchise, license or permit that is legally authorized and locally supervised by a governmental agency.

According to Capitol lobbyist Chris Micheli, even with these precautions, the full effects of AB 1776 cannot be determined until cases start getting litigated.

“The Cartwright Act at the state level and the Sherman antitrust statute at the federal level have more than a century’s worth of judicial decisions, and so there’s very, very clear law as to what these things mean,” Micheli said. “It’ll take potentially a decade or more of litigation to determine some of the parameters and law changes that they are proposing in AB 1776.”

The bill has passed through the Assembly and is set to be heard in the Senate Judiciary Committee on June 30th.

Olivia Bye is an intern with Capitol Weekly’s Public Policy Journalism Internship program.