California is on the brink of a significant overhaul of its antitrust laws with the introduction of Assembly Bill 1776, also known as the COMPETE Act. Authored by Assemblymember Cecilia Aguiar Curry (D-Winters), this legislation aims to update the state’s landmark Cartwright Act which has been in place since 1907. The bill seeks to address the growing concern of single-firm monopolies that have been increasingly controlling entire markets, particularly in industries like tech, healthcare, and retail.
The COMPETE Act is a response to the rapid changes in California’s economy, characterized by market consolidation and the rise of dominant single companies. It follows the recent AB 325, which addressed shared pricing algorithms and went into effect on January 1, 2026. The bill has garnered both widespread support and opposition, with consumer advocates and labor organizations backing it, while business trade groups have expressed concerns over potential legal uncertainty and economic impacts.
The COMPETE Act: Expanding the Cartwright Act
The Cartwright Act, California’s primary antitrust law, currently only applies to conduct between two or more firms, addressing practices such as bid-rigging, price-fixing, and market allocation. AB 1776 aims to expand this scope to include single-firm companies liable for anticompetitive business conduct, such as unreasonable restraints of trade and the formation and maintenance of monopolies or monopsonies.
Proponents of the bill argue that the current lack of state legislation to combat single-firm monopolies curbs workers’ rights, impairs small businesses, and raises prices for consumers. Lorena Gonzalez, President of the California Federation of Labor Unions, emphasized that monopolies suppress wages and manipulate markets, driving inflation and affecting affordability for American families.
Legal Uncertainty and Economic Concerns
A coalition of business trade groups, led by the California Chamber of Commerce, has expressed concern over the bill’s potential legal uncertainty and its economic effects. Ben Golombek, California Chamber of Commerce Executive Vice President and Chief of Staff for Policy, noted that the bill has faced unprecedented opposition from over 120 groups across various industries. He argued that the lack of definitions in the bill, combined with the departure from over 100 years of legal precedence, provides no guidance to businesses or the courts on what is legal or illegal.
Golombek also highlighted that the bill’s language could expose businesses to unseen legal liability. However, Gonzalez maintained that AB 1776 upholds the same intentions as current antitrust legislation and is designed to prevent large corporations from exploiting loopholes.
Key Provisions and Exemptions
The COMPETE Act includes several key provisions aimed at narrowing its impact to anticompetitive monopolies. It specifies that the validity of state claims should not be determined based on federal doctrine unless it is consistent with AB 1776. The bill also advises courts to liberally interpret California antitrust laws, which could lower the barrier of entry for state antitrust cases to make it to court.
To mitigate potential impacts on small businesses, the bill includes a carve-out for businesses with 100 employees or less and a maximum average annual gross receipt of $10 million over the three years prior to filing a complaint. It also protects entities acting within a contract, franchise, license, or permit that is legally authorized and locally supervised by a governmental agency.
Despite these precautions, Capitol lobbyist Chris Micheli noted that the full effects of AB 1776 cannot be determined until cases start getting litigated. He suggested that it could take a decade or more of litigation to determine some of the parameters and law changes proposed in the bill.
The bill has passed through the Assembly and is set to be heard in the Senate Judiciary Committee on June 30, 2026. If enacted, AB 1776 could significantly reshape California’s economic landscape, promoting fair competition and protecting workers, consumers, and small businesses from the adverse effects of single-firm monopolies.
