California State Capitol Dome at Sunset in Sacramento
SACRAMENTO — As California state lawmakers near the end of the current legislative session, California business groups are continuing their effort to block a push by unions and other left-wing groups to dramatically rewrite and lengthen the reach of California's state antitrust law, a move the business groups warn will chill the Golden State's economy by exposing an ever wider swath of employers, innovators and other businesses to costly legal and regulatory risk.
That sustained opposition comes despite recent changes to the legislation, intended to relieve the risk of compounding the changes to the state's business rules with an avalanche of private lawsuits even prominent California Democrats feared would bury the state's reputation as an incubator of tech and other innovations.
The California state legislature's 2025-2026 legislative year is scheduled to draw to a close on Aug. 31, the final day on which state lawmakers can vote on legislation introduced, read, debated and amended during that legislative calendar.
At the top of the list of hot-button legislative issues still remaining in Sacramento, however, sits the bill docketed as Assembly Bill 1776.
Called the COMPETE Act by its supporters, AB 1776 would greatly expand the ability of state regulators to pursue antitrust actions against businesses under California's state antitrust law known as the Cartwright Act.
Heavily promoted by a coalition that includes a long list of politically powerful labor unions so-called consumer advocates, trial lawyers and left-wing activist and anti-corporate business groups, the legislation would open a path for California regulators and prosecutors to pursue legal actions against a broad array of successful companies, who government officials or others may accuse of operating their businesses in ways that "restrain trade" in some way.
To this point, the California state law had only permitted such trade restraint or antitrust actions against two or more companies accused of working together to corner a market and block competition.
But under the new standards laid out in AB 1776, California state regulators and prosecutors would be authorized to pursue companies for supposed monopolistic actions, even if those companies don't actually control the bulk of a particular market. Analyses of the legislation indicate companies could be pursued if they hold as little as 20-30 percent of a market.
And the prosecutions would not be limited to companies based in California, but to those only operating in the Golden State, as well, meaning companies based anywhere else in the U.S. or the world could be targeted under the law.
Further, the legislation specifically calls for courts to reject longstanding definitions of antitrust behavior adopted by the U.S. Supreme Court, and instead to rely on less certain and yet unclear standards to define anticompetitive conduct under the revised Cartwright Act law.
Business groups have warned those changes would create significant legal uncertainty for companies operating in California and would inflict real harm on the state's economy, its communities and people.
In a statement released Aug. 21, the California Chamber of Commerce argued the new rules contemplated under AB 1776 would tilt the legal playing field against businesses.
The CalChamber, for instance, noted the legislation would force courts to ignore "real-world instances" where the supposed anti-competitive conduct of a business in one particular market actually generates "benefits for consumers in a related or adjacent market."
And the CalChamber noted supporters of AB 1776 have yet to demonstrate a real need for these changes, beyond their desire to empower actions against big business.
"... The bill's author and sponsors have never cited specific, real-world examples of the behavior they are trying to change —a concern CalChamber has expressed since the legislation was introduced," CalChamber wrote.
Despite such warnings, the legislation passed the California State Assembly earlier this year.
It is currently before the State Senate.
Most recently, the legislation passed its final committee hearing on Aug. 13, when the State Senate Appropriations Committee voted to advance AB 1776 to the full Senate, with a recommendation to enact the potential new law.
However, that recommendation only came after the bill's author, California State Assembly Majority Leader Cecelia Aguiar-Curry, D-Winters, begrudgingly agreed to remove language granting a so-called "right of private action" from the bill.
A law with a "right of private action" generally empowers trial lawyers to enforce the law using private lawsuits, filed on behalf of individuals, groups or organizations, against businesses or others who they claim may have violated the law.
And business groups and others warned such language would have allowed trial lawyers to use the law to unleash a torrent of private lawsuits against businesses of all sizes and types, potentially dealing a staggering blow to the Golden State's economy, and particularly harming its vaunted reputation as an incubator for technological innovation and tech sector startup businesses.
For example, an analysis from the Computer and Communications Industry Association , which represents some of the largest tech companies in the world, estimated lawsuits under AB 1776 would play a large role in costing the California state economy $670 billion by 2037, and cost the state of California nearly $9 billion in lost tax dollars, should the measure have become law with the right of private lawsuits included.
Aguiar-Curry and other AB 1776 supporters had resisted attempts to strip the private lawsuit authorization from the law, saying that removing the provision would amount to "gutting" the bill.
However, the threat to the state's economy appeared to be enough to persuade some prominent Democrats in the state Senate to threaten defeat for AB 1776 if the language authorizing private lawsuits wasn't removed before the bill hit the Senate floor.
That, in turn, led Aguiar-Curry to relent and amend the legislation to remove the right of private action. That action came over continued loud protests and objections from left-wing supporters of the legislation, who have continued to assert the private lawsuits are needed to address what they see as economic inequality exacerbated by economic consolidation and other restraints on trade.
The state Senate has not yet scheduled a vote on AB 1776.
And the CCIA has not yet released a new analysis of the legislation's costs without the threat of private lawsuits.
However, the CalChamber is still urging state lawmakers to reject the measure, saying its current form will create enough risk and uncertainty to set back the California economy.
