California Enacts Expanded Antitrust Law Targeting Single-Firm Monopolistic Conduct
Governor Newsom signed Assembly Bill 1776, the COMPETE Act, which expands California's Cartwright Act to prohibit single-firm monopolization and monopsonization, effective January 1, 2027. The law provides California's Attorney General and district attorneys with enhanced enforcement tools, though certain controversial provisions were removed during the legislative process. The expansion creates distinct legal challenges for California businesses, as it applies a different pleading standard than federal Sherman Act claims and allows courts to consider factors beyond established statutory standards.
Governor Newsom's signature on Assembly Bill 1776 represents a significant shift in California's approach to antitrust enforcement. The legislation amends a century-old state law to address conduct by individual dominant firms, an area previously governed only by federal Sherman Act provisions. The measure will grant California's top law enforcement officials new powers to pursue cases involving monopolistic practices, though lawmakers removed several contentious elements during the legislative process before final passage.
California courts have already demonstrated a willingness to interpret antitrust statutes more broadly than federal counterparts, permitting indirect purchasers to sue and treating certain practices as per se violations despite potential procompetitive justifications under national standards. The COMPETE Act builds on this foundation while deliberately excluding a private right of action for these claims, meaning enforcement remains exclusively in government hands rather than opening the door to class-action litigation.
The law may subject California-based companies and those operating significantly in the state to heightened antitrust scrutiny under standards distinct from federal requirements. Large technology firms, healthcare organizations, and other industries with concentrated market positions could face enforcement actions based on conduct previously evaluated under different legal frameworks. The absence of private litigation rights may limit some business exposure, though civil and criminal penalties—recently increased substantially—create substantial compliance and operational considerations for affected enterprises.