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The California Capitol on Thursday, April 30, 2026. AB 1776 would expand California antitrust reach, creating litigation risks that could chill investment, slow startups and cost jobs across the state.<\/p>\n
HECTOR AMEZCUA<\/p>\n
hamezcua@sacbee.com<\/p>\n
California faces serious economic challenges \u2014 including mounting private-sector job losses<\/a>, stagnating consumer spending<\/a> and the nation\u2019s highest unemployment<\/a> rate. In a recent analysis<\/a>, the California Center for Jobs & the Economy warned of deep structural problems that, if left unaddressed, risk sending the state into extended economic decline.<\/p>\n Given the circumstances, California lawmakers should be working on pragmatic policies meant to attract businesses, boost employment and strengthen the economy. Instead, they\u2019re deliberating on a radical new antitrust bill, Assembly Bill 1776<\/a>, authored by Assembly Majority Leader Cecilia Aguiar-Curry, D-Winters, that\u2019s likely to depress business investment and discourage startup formation.<\/p>\n According to bill analysis<\/a>, the stated purpose of AB 1776 is the \u201cpromotion and protection of free and fair competition.\u201d But if enacted, this bill could accelerate the exodus<\/a> of employers and talent from California, and, by one estimate, eliminate up to 1.6 million jobs<\/a> within a decade.<\/p>\n AB 1776, also known as the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act<\/a>, would change California\u2019s antitrust law in two fundamental ways, making it far easier for firms doing business in California to sue one another for common competitive behaviors.<\/p>\n First, the bill would extend California\u2019s foundational antitrust statute, the Cartwright Act, to include the actions of single firms. Currently, the Cartwright Act covers coordinated conspiracies \u2014 like collusion or price-fixing \u2014 between two or more firms. The proposed change would allow regulators and plaintiffs to challenge individual firm actions like price cuts or new-product rollouts.<\/p>\n Second, AB 1776 would dramatically alter key thresholds that distinguish competitive strategy from problematic anticompetitive behavior. Critically, the bill would allow a firm to challenge a rival\u2019s cost-cuts without ever showing that the cuts were predatory \u2014 that is, designed to drive competitors out of a given market.<\/p>\n Moreover, the bill would make it harder for a firm to defend itself by arguing that conduct challenged in one market benefited consumers or boosted competition in another market. AB 1776 would also make it easier for a firm to sue another firm simply for refusing to do business with it \u2014 and, perhaps most remarkably, the bill would allow plaintiffs to accuse a rival of unfairly dominating a market, even if the rival didn\u2019t hold a dominant market position.<\/p>\n Put plainly, if AB 1776 passed, a firm could sue a rival over standard competitive practices like offering promotional discounts or declining to work with the firm. The firm could have a solid case \u2014 even if the rival\u2019s discounts weren\u2019t predatory, or the rival had a good reason for eschewing the firm, and even if the rival held only a small share of the relevant market, and its actions benefited consumers.<\/p>\n That would create serious new risks for firms doing business in California. AB 1776\u2019s expanded reach and diminished thresholds would expose companies to litigation over competitive practices that have long been legal, including offering suites of services like Microsoft 365 or Google Business Profile; lowering prices to attract customers; or integrating new features \u2014 like Amazon\u2019s AI-powered Alexa for Shopping \u2014 into platforms.<\/p>\n Moreover, because many elements of AB 1776 depart<\/a> from well-established federal antitrust standards, businesses would face enormous uncertainty over what conduct is permitted, how the law would be enforced and how courts would interpret the new rules. Those legal, strategic and cost uncertainties would likely chill investment in California businesses and startups \u2014 slowing innovation, economic growth and job creation.<\/p>\n Indeed, the California Center for Jobs & the Economy estimates that the bill\u2019s passage could reduce economic activity by $1 trillion<\/a> over a decade.<\/p>\n