California Considering A Massive Expansion of Its Antitrust Laws

Legislative efforts to significantly expand California’s antitrust laws are working their way through the state legislature. The most comprehensive overhaul is Assembly Bill 1776 — the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act, introduced by Assembly Majority Leader Cecilia Aguiar-Curry, on March 23, 2026. AB 1776 is modeled closely after draft legislation recommended by the California Law Revision Commission (CLRC) in December. AB 1776 would not only significantly expand potential liability for single-firm conduct and monopolization but would also explicitly decouple California antitrust analysis from certain federal standards. Companies doing business in California should pay close attention to AB 1776 because of its potentially dramatic impact, including increased exposure to antitrust litigation and increased compliance costs.

Crowell & Moring is representing the California Chamber of Commerce (CalChamber) in monitoring, analyzing, and responding to AB 1776, as well as other efforts to expand California’s antitrust law, the Cartwright Act. 

Since its passage in 1907, the Cartwright Act has only applied to the coordinated conduct of two or more firms, such as collusion among competitors, but AB 1776 would prohibit single˗firm “restraints of trade.” Although the “restraint of trade” term used in AB 1776 is a familiar one in analyzing the actions of multiple firms, no court has ever defined how that terms applies to single-firm conduct, and the bill does not do so. Under this provision, unilateral pricing decisions, exclusive dealing arrangements, refusals to deal, and restrictions on distribution made by a single company could constitute unlawful restraints of trade, particularly if they disadvantage a rival.

Moreover, while the federal single˗firm conduct law, Section 2 of the Sherman Act, does not apply to businesses unless they possess a large share of the market, AB 1776 lacks a similar market share threshold, and specifically states that a plaintiff is not required to show that a firm “has or might achieve a market share or has market power at or above a threshold recognized under Section 2” of the Sherman Act. AB 1776 also prohibits monopolization by “one or more persons,” which is a break from existing federal law that has always defined monopolization —as the name implies —as the complete domination of a market by a single competitor.

Historically, California courts have interpreted the Cartwright Act by considering relevant federal precedent, but the COMPETE Act expressly states that certain federal antitrust principles are “not required” to prove a claim. For example, in the predatory pricing context, a plaintiff will not be required to establish that the defendant priced below cost or that the defendant is likely to recoup its losses from below-cost pricing. In a refusal to deal case, it will not be necessary for a plaintiff to make a showing that the defendant altered or terminated a prior course of dealing with the alleged victim of the refusal. Pleading and proving a relevant antitrust market will not be required “where there is direct evidence of market effects or power.” And when challenging conduct impacting a multisided platform, a plaintiff need not show that the defendant’s conduct caused harm to more than one side of the multisided market. 

Two additional bills have been introduced in the legislature aimed at amending the Cartwright Act. SB 1074 (Wiener), dubbed the Blocking Anticompetitive Self-preferencing by Entrenched Dominant platforms (BASED) Act, would ban California’s largest tech companies —those with more than $1 trillion in market capitalization and 100 million or more monthly users in the U.S. —from promoting their own products and content ahead of smaller competitors. SB 1365 (Allen) proposes, among other things, permitting district attorneys and city attorneys — in cities with over 750,000 residents — to file civil or criminal Cartwright Act claims on behalf of their cities and citizens.

If passed, these legislative efforts could significantly impact competition and innovation in California as the courts and businesses work to interpret and comply with the state’s new antitrust standards. In addition, companies doing business in California may see increases in both litigation and compliance costs.

As counsel for CalChamber, Crowell is actively engaged in evaluating AB1776, and the other antitrust bills, based on its previous advocacy before the CLRC, as well as advising on the import and effect of the proposed legislation. If you are interested in joining CalChamber’s coalition, or want to hear more about these important, ongoing legal developments, please contact any Crowell lawyer listed below.