California Signs COMPETE Act, First State Bar on Single-Firm Conduct
Governor Newsom signed AB 1776 on September 30, creating the first U.S. state prohibition on single-firm conduct and reshaping California antitrust practice.
On September 30, Governor Newsom signed AB 1776, the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act. According to Cozen O'Connor, the statute is the first in the country to extend California antitrust law to cover single-firm conduct — conduct that does not require agreement, coordination or monopoly power in the traditional sense. That departure from Clayton Act and Sherman Act § 1 architecture is the provision most likely to draw early challenge.
Why counsel should care: California is the largest state economy and its antitrust enforcer has already been aggressive. A state-law pathway reaching unilateral pricing, output or terms decisions gives private plaintiffs a forum that does not require proof of market power or agreement, outside the jurisdictional and venue constraints that have limited state antitrust claims. Companies with significant California sales face parallel exposure even where conduct is lawful under federal law, and multistate businesses should assess whether the statute invites copycat legislation. Expect early attention to preemption, dormant Commerce Clause and due-process questions, and to carve-outs not detailed in the reported summary.
Next step: map California-facing unilateral conduct for review; platform, vendor and healthcare contracting are the pressure points. Watch for implementing regulations and any injunction sought after enactment, and confirm the statutory text rather than relying on summaries.