California Enacts Expansion of its Antitrust Laws: Five Key Takeaways

Key Takeaways

1. California Monopolization Claims Are Now Governed by State Law, and Federal Precedent Is “Not Conclusive”

2. The Act Codifies Pro-Enforcement California Precedent as “Broader in Range and Deeper in Reach” Than the Sherman Act, but Leaves “Monopoly” Undefined

3. Substantial Market Power Is the Operative Threshold in Product, Service, and Labor Markets

4. Only the California Attorney General and District Attorneys Can Bring Monopolization Claims

5. Private Plaintiffs Stand to Gain As Pro-Enforcement Principles Codified For Every Cartwright Act Claim

California is now the first state to write its own monopolization law and tell its courts that federal antitrust precedent does not control. The California legislature passed the COMPETE Act on August 30, 2026, amending the state’s antitrust law, the Cartwright Act, to cover single-firm conduct.¹ Governor Gavin Newsom signed the bill into law yesterday morning. Other states have enacted parallel versions of the Sherman Act, but California’s law goes further: it declares that federal precedent is “not conclusive” and that California’s monopoly law is “not modeled on federal antitrust statutes.”

The law codifies that California’s new monopoly law and other antitrust laws are “broader in range and deeper in reach” than the federal Sherman Act. Still, the California legislature did not define what will be considered an illegal monopoly under the law. Instead, the law codifies several guiding principles and existing California antitrust law precedents to serve as a basis for state judges to create a monopoly common law to govern the world’s fourth largest economy.

Under the new law, an illegal monopoly:

• May exist in labor, product, or services markets.

• Requires proving substantial market power, either through direct or indirect evidence. This standard can be met by proving “lower actionable market shares” than federal monopoly law.

• May be proven under either a rule of reason, quick-look, or per se standard.

While the law is more expansive than its federal counterpart, the legislature also codified safeguards for lawful business activity, including a carve-out for small businesses and monopoly power earned through superior products or services. The California Senate also removed or pared back several provisions of the Assembly bill, including:

• A private right of action, leaving enforcement to the Attorney General and district attorneys.

• A prohibition on out of market procompetitive justifications.

• Provisions displacing specific federal liability requirements such as those created for refusals to deal, predatory pricing, and two-sided markets.

Clients should prepare for more vigorous government enforcement against single-firm conduct in California. Firms whose conduct either substantially affects California commerce or occurs in part within California fall within the Cartwright Act’s reach. The new law reaches firms that fall short of federal monopoly power, and it puts enforcement in the hands of the Attorney General and district attorneys rather than private plaintiffs. Cartwright Act claims may become less costly to prove and harder to dismiss before trial due to the principles set out in the COMPETE Act.

Because the COMPETE Act is structured as an amendment to the Cartwright Act, the law’s codification of pro-enforcement precedent binds courts adjudicating any Cartwright Act claim. Therefore, even though private plaintiffs cannot bring monopolization claims under the Cartwright Act, this law could also lower barriers for private plaintiffs to bring restraint of trade claims under other provisions of the Cartwright Act.

¹  A.B. 1776, 2025–26 Reg. Sess. (Cal. 2026), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB1776.

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If you have any antitrust questions or would like more information about this matter, please contact one of the following authors:

Richard Powers Richard@Kressinpowers.com

Michael Swerdlow michael@kressinpowers.com

Benjy Apelbaum benjy@kressinpowers.com

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