The COMPETE Act Becomes Law – What the New Antitrust Law Means For California Businesses

California AB 1776 (Aguiar-Curry) — dubbed “The Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act” — was signed into law by Governor Gavin Newsom, on September 30, 2026. The new law, which takes effect on January 1, 2027, bans single-firm monopolization, making it “unlawful for every person to monopolize or monopsonize, attempt to monopolize or monopsonize, maintain a monopoly or monopsony, or combine or conspire with another person to monopolize or monopsonize any part of trade or commerce.” Crowell & Moring served as counsel to the California Chamber of Commerce (CalChamber) throughout the legislative process, advising on the bill’s impact and advocating for critical amendments designed to preserve competition and innovation in California.

The statute attempts to distinguish itself from federal antitrust standards, noting that “federal antitrust laws are at most instructive” and that California antitrust law “is broader in range and deeper in reach” than federal counterparts. In addition, the law requires the government to plead and prove that a defendant possesses “substantial market power,” but does not define the term, likely leaving California courts to interpret that standard. Indeed, in his signing statement, Governor Newsom noted that “the bill's reference to ‘substantial market power’ should be understood as a necessary — but not sufficient — condition to prove unlawful conduct.”

Earlier in the year, Assembly Member Aguiar-Curry introduced a much-broader version of AB 1776 – modeled closely on draft legislation recommended by the California Law Revision Commission – creating a number of novel antitrust standards and concepts. That version of the bill raised significant concerns among CalChamber and a coalition of California businesses. Through multiple rounds of hearings and testimony, the Legislature ultimately made significant amendments, including the following:

• Removal of a private right of action, so that enforcement is now left exclusively to the Attorney General and district attorneys;
• Elimination of broad prohibitions on single-firm “restraints of trade” and multi-firm monopolization;
• Withdrawal of a ban on “cross-market balancing” of competitive effects;
• Deletion of provisions that would have limited California courts’ ability to consider certain U.S. Supreme Court decisions and dismiss state antitrust claims based on federal case law;
• Creation of a “small business” exception; and
• Addition of a safe harbor (consistent with federal law) for businesses that lawfully obtain or maintain market power through superior products or business acumen.

Despite these amendments, AB 1776 is still a significant expansion of California’s antitrust law. Businesses with California operations should assess their exposure under the AB 1776’s monopolization and monopsonization standards, particularly those firms in technology and platform-based markets, or industries where pricing, licensing, or market-share gains are central to competition strategies.

For questions regarding AB 1776 and its potential impact on your business, please contact any Crowell attorney listed below