California adopts single-firm conduct antitrust legislation 

California law expands to broadly prohibit monopolization

On September 30, 2026, California Governor Gavin Newsom signed Assembly Bill 1776 (the “COMPETE Act”) into law.[1] The COMPETE Act, which will take effect on January 1, 2027, expands California’s existing antitrust law, the Cartwright Act, to reach single-firm conduct for the first time. 

The COMPETE 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.”[2] The alleged monopolist must have substantial market power, which may be proven through direct or indirect evidence.[3]

Most businesses operating in California should expect to be covered by the new law, which excludes only small businesses with officers domiciled in California, less than 100 employees, and average annual gross receipts of ten million dollars or less[4] as well as arrangements with government authorities.[5]

At the same time, consistent with Section 2 of the Sherman Act, the law affirms that “a business may lawfully obtain and maintain market power or monopoly power through the superiority of its products, services, or business acumen.”[6]

Key takeaways

The new law fills a long-standing gap between the federal Sherman Act and California’s preexisting Cartwright Act. Many observers may be surprised to learn that the Cartwright Act did not already reach purely unilateral conduct. Many other state antitrust laws cover unilateral conduct. And states like California have long had the right to bring claims based upon unilateral conduct in federal court under Section 2 of the Sherman Act. 

The COMPETE Act emulates the single-firm scope provisions of the Sherman Act while expressly emphasizing that the Cartwright Act has been interpreted by California courts as “broader in range and deeper in reach” than the Sherman Act.[7] It will now allow the California Attorney General to bring monopolization claims in California state court.

Unlike Section 2 of the Sherman Act, California’s new monopolization statute will not be enforceable through private litigation. The legislature’s decision not to include a private right of action means that the law may only be enforced by the Attorney General or district attorneys.[8] In the hands of government enforcers, the COMPETE Act may prove to be an effective tool. While the COMPETE Act does not provide for treble damages itself, other provisions in the Cartwright Act provide a basis for treble damages for actions brought by the Attorney General acting in California’s parens patriae capacity.[9]

Although the final version of the COMPETE Act removed a private right of action, private litigants have long sought to “plead around” the absence of a single-firm conduct prohibition in the Cartwright Act by pursuing monopolization by using either the “unlawful” prong of California’s Unfair Competition Law (“UCL”), by alleging that the challenged conduct violated Section 2, or the “unfair” prong.[10] UCL claims do not permit plaintiffs a right to jury trial, however, and do not provide damages beyond restitution of ill-gotten gains.[11] The COMPETE Act does not change any of this; successful businesses active in California will still face the threat of UCL-based claims by competitors. 

Notably, although the COMPETE Act’s “substantial market power” standard is not defined, the law’s drafters have broadly directed 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.”[12] The COMPETE Act also provides that “[i]nterpretations of federal antitrust laws are at most instructive” in applying the COMPETE Act.[13] Legislators have further noted that California law imposes “differing burdens of proof” and “lower actionable market shares.”[14]

Consistent with an expansive understanding of state enforcers’ powers under the COMPETE Act, Governor Newsom’s signing remarks to the State Assembly caution against overuse of the Act, providing that “the bill’s reference to ‘substantial market power’ should be understood as a necessary—but not sufficient—condition to prove unlawful conduct” and that “additional legislation may be required to clarify the appropriate standards.”[15] Such statements are not binding on future administrations, however, and they could seek to enforce the provision more aggressively. 

The COMPETE Act is a meaningful extension to the letter of California antitrust law and will require businesses to assess their risk under its new provision. Nevertheless, the absence of a private right of action means that the law’s impact on successful businesses present in California may have less impact than earlier drafts of the legislation portended. How significant the revision to the Cartwright Act to expressly address single-firm conduct proves to be may depend on future enforcement decisions made by California’s Attorney General as well as how courts interpret its expansive language.