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In the United States, federal antitrust enforcement has historically received most of the attention, while state enforcers have played a more limited role. Times have certainly changed—in recent years, the states have upped the ante and are now frequently taking a more aggressive enforcement posture than their federal counterparts.
Among the states, California is a standout. The California Attorney General’s office has pursued high-profile antitrust litigation in recent years. And, on August 30, 2026, its legislative branch has moved yet again to strengthen its state antitrust legislation, the Cartwright Act, by sending a new bill—the “Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act” or Assembly Bill 1776—to Governor Gavin Newsom for his signature. If signed, AB 1776 would provide California’s state enforcers with a brand-new mechanism for challenging single-firm monopolistic conduct.
New Tool in California Enforcers’ Toolbox
AB 1776 marks a significant change to California’s antitrust law. As things stand, the Cartwright Act does not explicitly prohibit unilateral monopolistic conduct. Instead, it focuses on anticompetitive contracts, combinations, and conspiracies between two or more parties. And although California has legislation addressing unfair business practices, this legislation does not effectively address the kind of single-firm monopolistic conduct targeted by Section 2 of the Sherman Act.
AB 1776 was modeled after recommendations by the California Law Revision Commission, which considered how best to modernize the Cartwright Act to address unilateral conduct. The Commission identified California as one of the few U.S. states with antitrust laws that do not address single-firm conduct, which has limited California’s ability to pursue anticompetitive single-firm conduct except via the Sherman Act in federal court.
AB 1776 Proposes a California-Specific Test and Finds Section 2 of the Sherman Act “At Most Instructive”
The Prohibition
If signed into law, the amended Cartwright Act will make 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.” In very simple terms, a monopoly involves a seller that obtains or maintains market power through anticompetitive acts, whereas a monopsony involves a buyer that obtains or maintains market power through anticompetitive acts.
For such violations, the government would be required to prove “substantial” market power, either through direct or indirect evidence.
The Analytical Framework
In fact, the bill explains that the “California Supreme Court has determined that the Cartwright Act is ‘broader in range and deeper in reach’ than the federal Sherman Anti-Trust Act,” including, for example, requiring lower actionable market shares, recognizing broader harms and per se conduct, and allowing indirect purchaser recovery.
The bill further instructs courts to “liberally interpret California’s antitrust laws to best promote free and fair competition and be mindful that California favors ‘maximizing’ effective deterrence of antitrust violations.”
No Private Right of Action
Notably, after much debate, only California’s state enforcers stand to benefit from this change. The legislature considered including a private right of action in AB 1776, but ultimately removed the provision before sending it to Governor Newsom.
Exceptions
AB 1776 features a few noteworthy exceptions:
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Small Business Exception: AB 1776 does not apply to small, independently owned and operated businesses that (1) have a principal office in California, (2) have officers domiciled in California, (3) employ 100 or fewer employees (inclusive of any affiliates), and (4) generate $10 million or less in annual sales (averaged over the last three years).
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Government Exceptions: AB 1776 does not prevent, limit, or prohibit any exclusive franchises, contracts, licenses, or permits that are granted and supervised by a local, state, or federal governmental agency. Nor does it prohibit any other conduct required or authorized by state or federal law that is granted and supervised by a local, state, or federal government agency.
Key Implications
Assuming AB 1776 is signed into law, companies doing business in California may see an uptick in state antitrust enforcement focused on alleged unilateral monopolistic conduct. In the absence of a private right of action, California’s Attorney General, Rob Bonta, may face pressure to put these new enforcement powers to work quickly. AG Bonta has already proven himself to be an aggressive antitrust enforcer, suggesting he will not shy away from high-profile cases.
As described above, California’s monopolization provision is broader in scope than Section 2, and therefore may be used by California’s enforcers to target forms of monopolistic conduct that federal enforcers have not traditionally pursued, whether because of the scope of the law itself or because of federal enforcement priorities. Either way, with a new enforcer on the scene, AB 1776 inevitably increases the overall likelihood of antitrust investigations and enforcement for companies subject to the Cartwright Act—especially for Big Tech companies, which have been a major catalyst for the amendments.
As California’s enforcers prepare to enforce the expanded Cartwright Act, companies subject to the Cartwright Act should review their antitrust compliance programs and consult with trusted antitrust counsel to address any potential compliance vulnerabilities.
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