Assembly Bill 1776, known as the COMPETE Act, would broaden California’s antitrust laws to let individuals and businesses take companies to state court if they believe unfair, monopolistic tactics have caused them harm. Currently, such lawsuits generally require proof that two or more companies conspired to squeeze out competitors. Federal law does allow claims against a single company acting alone, but supporters of the bill argue that federal courts have weakened antitrust protections so significantly that California needs its own, stronger version.

The debate has emerged as one of the more heated fights of this legislative session, drawing battle lines between labor unions and trial attorneys on one side and business and technology lobbying groups on the other. Together, these interests have poured more than $106 million into California campaign coffers since 2000, according to CalMatters’ Digital Democracy database.

Backers of the bill say it would give everyday Californians a legal tool to keep neighborhood grocery stores and pharmacies from being squeezed out, prevent single corporations from controlling entire supply chains that farms and restaurants depend on, and preserve patient choice in health care.

Assembly Majority Leader Cecilia Aguiar-Curry, a Davis Democrat who authored the bill, told the Senate Judiciary Committee last month that more than three-quarters of American industries have grown increasingly consolidated since the late 1990s.

“When companies gain that much power and abuse it, that means higher prices, less choice, fewer opportunities for job creators to start small businesses and suppressed wages for working families,” Aguiar-Curry told the panel.

Business advocates counter that the measure would open the door for opportunistic law firms to target companies with costly lawsuits, regardless of merit. They point to California’s history with other consumer-protection statutes — covering disability access, product warning labels, wage claims and privacy — that critics say have spawned a cottage industry of litigation aimed more at settlements than genuine reform.

The California Chamber of Commerce has been especially vocal in its opposition, going so far as to put up billboards near the state Capitol earlier this year calling out Aguiar-Curry by name. One read: “Cecilia, prices are high enough already. Don’t make life more expensive for California consumers.” A Chamber spokesperson declined to comment further on the billboard campaign.

Rather than quiet the bill’s momentum, though, the public pressure campaign appears to have strengthened support among many Democrats, even as some moderates in the party remain uneasy about the potential impact on businesses operating in the state.

Babette Boliek, a law professor at Pepperdine University and former chief economist for the Federal Communications Commission, said those concerns aren’t unfounded. She argues the bill’s language is too vague, potentially giving judges broad discretion to rule based on sympathy rather than clear evidence of harm — comparing it to enforcing “a speed limit that no one knows exists.”

In response to criticism, Aguiar-Curry’s office added a carve-out meant to shield small, independently owned California businesses — those with 100 or fewer employees and average annual gross revenue under $10 million over the past three years.

Still, Cal Chamber Executive Vice President Ben Golombek argues that thousands of businesses of all sizes would remain exposed to expensive litigation, including lawsuits filed by rival companies. “This unprecedented and massive legal liability for businesses of every size — small, medium, and large — that this bill creates is why we’re so opposed to it,” he said.

On the other side, labor leaders say the measure is overdue. Mark Ramos, president of the United Food and Commercial Workers Western States Council, said increasing consolidation among grocery chains has made it harder for workers to negotiate fair wages, since fewer competitors means less pressure on employers to offer better pay. “With that consolidation has come the larger challenge of not being able to negotiate a contract that allows our members to kind of thrive in their local economy because these grocers no longer have to compete against each other,” Ramos said.

Despite the bill’s momentum, some Democrats remain cautious. Sen. Tom Umberg, a Santa Ana Democrat who chairs the Senate Judiciary Committee, has raised concerns about allowing private citizens and businesses — rather than just government prosecutors — to file these lawsuits. He has pushed for enforcement to rest solely with the state attorney general and local district attorneys, at least for now.

“We want to make sure that we are not stifling competition by virtue of the threat of lawsuits,” Umberg told the committee.

Aguiar-Curry has agreed to make several changes Umberg requested but has stopped short of limiting enforcement power to prosecutors alone. She said she would keep refining the bill to make it “harder to bring a meritless suit” before its next hearing.

The bill cleared the Judiciary Committee, with only Republicans voting against it. However, Umberg abstained rather than casting a “no” vote — a move that carries the same practical effect. He was among 16 Democrats who declined to vote when the bill narrowly passed the Assembly, a common maneuver lawmakers use to avoid publicly opposing legislation backed by powerful allies while still signaling discomfort.

The COMPETE Act is next scheduled to be heard by the Senate Appropriations Committee when the Legislature reconvenes from summer recess in early August.

Supporters are hoping the final version of the bill preserves the right of ordinary Californians to sue over anticompetitive conduct. Lee Hepner, senior legal counsel at the American Economic Liberties Project, an advocacy group focused on curbing corporate monopolies, said allowing private lawsuits is essential to keeping large corporations in check.

Without that option, he warned, companies with deep pockets and political influence could pressure regulators and lawmakers into looking the other way. “The private right of action is a critical backstop to the politicization of antitrust enforcement, which threatens the entire project of policing markets for fairness,” Hepner said.

Original source: CalMatters

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