Gov. Gavin Newsom signed Assembly Bill 1776, the COMPETE Act, into law on Tuesday, giving California its first statewide ban on single-company monopolies — but not before lawmakers stripped out a provision that would have let ordinary businesses and consumers sue over anticompetitive conduct themselves. The law takes effect January 1, 2027, and expands California's century-old Cartwright Act to explicitly prohibit monopolization and monopsonization by a single dominant firm, closing a gap that courts had found left such one-sided conduct unaddressed.
A Century-Old Law Gets an Update
The bill's author, Assemblymember Cecilia Aguiar-Curry, argued that government has a responsibility to step in when corporations use their size to crush competitors rather than outcompete them on products or services, according to the Sacramento Bee. The measure grew out of a three-year review by the California Law Revision Commission examining whether the 1907 Cartwright Act needed updating, as reported by CalMatters. Courts had previously found the Cartwright Act did not clearly bar a single company from excluding rivals or treating them differently, per the Bee's reporting — a loophole the new law is designed to close.
Newsom said the law levels the playing field for small businesses, makes it easier to open and expand a business, cuts red tape, and protects competition, according to the Sacramento Bee. On the legal side, Crowell & Moring notes that AB 1776 amends the Cartwright Act to prohibit single-firm monopolization and monopsonization, and describes the measure as still a significant expansion of California antitrust law despite the changes it underwent before passage, per the firm's client alert.
Enforcement Narrowed to Government Lawyers Only
The version Newsom signed looks very different from where it started. An earlier draft would have allowed anyone — any individual or business — to sue a company directly over alleged anticompetitive tactics, the Bee reports. Lawmakers removed that private right of action, and CalMatters reports enforcement now rests exclusively with the California Attorney General and local district attorneys. Crowell & Moring confirms that enforcement is left exclusively to the Attorney General and district attorneys, and notes that government plaintiffs must still plead and prove that a defendant holds substantial market power — a term the statute does not define, which the firm says will likely leave California courts to work out the standard themselves.
The law also carves out an exemption: it does not apply to California companies with fewer than 100 employees and less than $10 million in annual revenue, according to the Bee. The American Economic Liberties Project, which had initially backed the bill, withdrew its support after the amendments, saying that removing the private right of action and a related provision stripped the law of its teeth, the organization said in a statement. California is one of only five states without a prohibition on single-firm monopolization conduct, the group noted, and warned that the amended bill would make California one of only two jurisdictions whose antimonopoly law bars private parties from enforcing it — joining Arkansas, according to the American Economic Liberties Project.
Business Groups Fought the Bill, Then Claimed a Partial Win
The California Chamber of Commerce opposed AB 1776 from the start and did not want it to become law, according to the Bee, and the group launched a multimillion-dollar ad campaign over the summer to weaken it, per CalMatters. Tech companies including Meta and Google also spent hundreds of thousands of dollars lobbying legislators on the bill and other issues, CalMatters reported. The Chamber argued that a private right of action would expose businesses of all sizes to a wave of frivolous lawsuits, and separately said the law is incompatible with federal antitrust law, according to CalMatters and the Bee. Even so, the Chamber acknowledged the final version is less damaging than earlier drafts, the Bee reports.
Nidhi Hegde, who spoke for the American Economic Liberties Project, said the organization remains committed to a real antimonopoly agenda in California, not one negotiated with corporate interests, according to the Bee's reporting. Consumer and labor groups, meanwhile, supported the bill's signing, the Bee notes, even as advocates broadly said the final law does not go far enough. AB 1776 was intended to help small businesses being pushed out by larger corporations and to put a check on corporate power in California, according to the Bee — leaving its real-world impact to depend heavily on how aggressively the Attorney General's office and district attorneys choose to use their newly exclusive enforcement authority once the law takes effect at the start of 2027.
