California COMPETE Act Signed, Enabling Prosecutorial Monopolization Claims
Signed Sept. 30, 2026 and effective Jan. 1, 2027, A.B. 1776 lets California prosecutors sue single firms for monopolization or monopsonization under new Cartwright Act sections 16730-16732.
California Gov. Gavin Newsom signed A.B. 1776, the COMPETE Act, on Sept. 30, 2026, amending the Cartwright Act to reach unilateral conduct for the first time. Effective Jan. 1, 2027, new Section 16731 authorizes the Attorney General and district attorneys — not private plaintiffs — to sue for monopolizing, monopsonizing, attempting either, maintaining a monopoly or monopsony, or combining to do so. Section 16731 also bars the new provisions from serving as predicates in private Unfair Competition Law claims, closing the private class-action channel.
The surrounding architecture matters more than the headline prohibition. Section 16730 codifies that federal antitrust precedent is "at most instructive," while preserving the In re Cipro Cases rule that firms may lawfully gain market power through product superiority or business acumen. Section 16731 requires the government to prove substantial market power and applies Cipro's burden-shifting, procompetitive-justification framework. Carve-outs shield qualifying small businesses and holders of government franchises, licenses or permits.
Because the statute leaves exclusionary conduct undefined, prosecutors may theorize beyond Sherman Act precedent, including in labor markets. Defense-side risk compounds: California does not apply Twombly/Iqbal plausibility, discovery opens fast, and three-fourths jury verdicts are permitted. Watch the first complaints after January 2027 and tension between Section 16732's liberal-construction mandate and the Governor's caution against penalizing superior competition.