California Increases Antitrust Penalties

Earlier this month, California enacted Senate Bill 763 (“SB 763”). The legislation amends the state’s long-standing antitrust statute, the Cartwright Act, to increase both criminal and civil maximum penalties for corporations and individuals.  California Attorney General Rob Bonta, whose office is responsible for enforcing the Cartwright Act and stands to benefit from any civil penalties recovered under the new law, sponsored the bill.

Under the new law, maximum corporate criminal fines for each violation will increase from $1 million to $6 million and individual maximum criminal fines will increase from $250,000 to $1 million per violation. In actions brought by the Attorney General or a district attorney, courts can impose civil penalties of up to $1 million per violation based on factors including nature, seriousness and persistence of the misconduct. The new law does not specify what constitutes a “violation” (e.g., whether it pertains to each anticompetitive agreement, or each sale at a supracompetitive price made pursuant to an anticompetitive agreement).  The law also gives the courts discretion to apply fines or penalties under the maximum statutory amounts.

California Attorney General Bonta is an active enforcer of California’s antitrust laws and an avid supporter of the bill.  The bill also provides that any damages or criminal fines recovered by the Attorney General will be deposited in the Attorney General’s antitrust account rather than the state’s general fund, as before.  This added source of funds may provide the Attorney General with additional resources and incentives to pursue antitrust enforcement.

Crowell & Moring’s team is closely monitoring these developments and is prepared to help your business navigate antitrust compliance and risk-mitigation strategies.