California lawmakers have sent Gov. Gavin Newsom a bill that would hand state prosecutors broader authority to challenge big businesses accused of squeezing out competitors, capping months of tense negotiations between consumer advocates and some of the state’s most influential business interests.
Assembly Bill 1776, known as the Compete Act, cleared both chambers of the Legislature after its author, Assembly Majority Leader Cecilia Aguiar-Curry of Davis, agreed to soften several provisions that had drawn fierce opposition from the California Chamber of Commerce and major biomedical and pharmaceutical companies.
As passed, the bill would let the state attorney general and local district attorneys sue individual companies over alleged anticompetitive conduct. Currently, California’s century-old antitrust law, the Cartwright Act, only allows such lawsuits when multiple businesses are accused of colluding together — leaving prosecutors with little recourse against a single dominant company accused of abusive market behavior.
Aguiar-Curry said the measure responds to decades of business consolidation that has reshaped entire industries since the late 1990s. She based the legislation on findings from a three-year study by the Legislature’s California Law Revision Commission, which examined whether the 1907-era Cartwright Act needed modernizing.
“This is a strong step forward for antitrust enforcement and helps our public enforcers take on monopoly behavior while protecting our workers, consumers, and small businesses,” Aguiar-Curry said.
Sen. Angelique Ashby, D-Sacramento, backed the bill on the Senate floor, pointing to local examples of how market concentration hurts everyday businesses.
“Here in Sacramento, our independent venues struggle to compete in a world where only a few companies control platforms,” Ashby said. “Across the state, our independent bookstores are being undercut by massive chains. Restaurants have fewer suppliers and pay higher prices for things” like ingredients and basic supplies.
The bill passed the Senate 30-9 and the Assembly 55-15, with most Republicans voting no. Neither chamber engaged in extended floor debate before the votes.
Consumer groups, labor unions and small business advocates rallied behind the legislation, arguing it would stop large corporations from squashing competitors and suppressing wages. Even after the bill was scaled back, supporters called its passage a significant victory.
“What is going to the governor is a bill that lets California’s attorney general and district attorneys go after the dominant corporations that block competitors, squeeze out small businesses, suppress wages, and drive up prices,” said Teri Olle, vice president of Economic Security California Action, a group pushing for stronger antitrust enforcement.
The California Chamber of Commerce, which represents nearly 12,000 businesses statewide, fought hard against the bill throughout the session, calling it one of its top legislative priorities to defeat. Chamber officials took particular issue with an early version of the bill that would have allowed private individuals and companies — not just prosecutors — to sue businesses directly over alleged anticompetitive practices.
“We think it’s very, very, very, very flawed and dangerous,” Ben Golombek, the chamber’s head of policy, said during an August panel discussion.
The chamber placed the bill on its annual list of legislative “cost drivers,” put up billboards near the state Capitol criticizing Aguiar-Curry by name, and later launched a seven-figure advertising campaign against the measure. Once the author removed the private right of action and made other changes, the chamber dropped its formal opposition.
Questions remain about how much the new authority could cost the state. The Department of Finance opposed the bill, citing uncertainty over how many cases the attorney general’s office might pursue and whether existing funding sources — the Unfair Competition Law Fund and the Attorney General Antitrust Account — would be enough to cover the expense.
That concern carries weight given Attorney General Rob Bonta’s active record challenging corporate consolidation. Bonta recently led opposition to Paramount Skydance’s acquisition of Warner Bros. Discovery, signaling his office’s willingness to take on major antitrust fights if the bill becomes law.
Original source: CalMatters
