Governor Gavin Newsom signed the COMPETE Act on September 30, 2026, expanding California’s Cartwright Act to let state prosecutors target single-firm monopolization. Set to take effect on January 1, 2027, the law creates a new public enforcement tool for the attorney general and district attorneys while exempting small businesses.
California is redrawing the boundaries of state antitrust enforcement giving public prosecutors new authority to pursue dominant companies for unilateral anticompetitive conduct. The legislation, known as Assembly Bill 1776 or the Competition and Opportunity in Markets for a Prosperous, Equitable, and Transparent Economy Act, was signed into law by Governor Gavin Newsom after clearing the legislature on a largely party-line vote on August 30, 2026.
For more than a century, California’s primary antitrust statute, the Cartwright Act enacted in 1907, focused almost exclusively on multi-firm agreements and conspiracies. That left a significant gap when prosecutors tried to challenge a single dominant corporation engaging in exclusionary tactics. The new statute closes that void by explicitly barring companies from monopolizing or attempting to monopolize trade or commerce on their own.
How Assembly Bill 1776 Changes Cartwright Act Enforcement
The statute introduces several key structural shifts for the state’s legal framework. Effective January 1, 2027, the law makes it unlawful for every person to monopolize or monopsonize, maintain a monopoly or monopsony, or conspire to do so across any part of trade or commerce.
Unlike federal antitrust rules, which allow private lawsuits, the COMPETE Act restricts enforcement strictly to public officials. Only the California attorney general and district attorneys can bring claims under the new single-firm provisions. Lawmakers carved out this limitation during late-session negotiations to guard against a wave of private litigation.
The legislation also addresses buyer-side power. By explicitly reaching monopsonization, the statute brings procurement, labor markets, and platform practices into the regulatory crosshairs. Prosecutors can examine how dominant buyers squeeze suppliers or engage in monopsonization throughout the state.
Plaintiffs Must Prove Defendants Possess Substantial Market Power
Government plaintiffs bringing a case under the new statute must allege and prove that a defendant possesses substantial market power using direct or indirect evidence. In his signing message, Governor Newsom emphasized that substantial market power should be treated as a necessary but not sufficient condition for liability, warning against penalizing companies that achieve dominance through superior products or business acumen.
The law directs state courts to apply the structured rule-of-reason framework established in the California Supreme Court case In re Cipro Cases I & II while interpreting state antitrust provisions broadly. Federal antitrust rulings remain instructive rather than binding.
Enforcement officials wasted no time connecting the new authority to recent high-profile federal verdicts. In announcing the legislation, Attorney General Rob Bonta’s office specifically pointed to the April antitrust verdict against Live Nation and Ticketmaster, where a federal jury found that Ticketmaster illegally maintained monopoly power in primary ticketing markets.
Exemptions and Corporate Pushback During the Legislative Fight
The path to enactment involved a bruising political battle. Business groups, including the California Chamber of Commerce, fought the legislation aggressively. While CalChamber acknowledged that amendments removed several of the most damaging provisions — such as a private right of action and broad restrictions on single-firm restraints of trade — the organization remained opposed to its enactment, arguing it is incompatible with federal antitrust standards.
At the same time, progressive and labor advocates expressed frustration that compromises watered down the original vision. The American Economic Liberties Project, which helped craft early drafts of the bill, withdrew its support after lawmakers stripped out the private right of action.
To protect smaller operations, lawmakers included a specific carve-out. The statute exempts independent California businesses that, along with their affiliates, maintain fewer than 100 employees and less than $10 million in average annual gross receipts over the preceding three years. Government-supervised franchises and permitted contracts also receive protection.
Permit Streamlining and Economic Context in the Golden State
Alongside the antitrust overhaul, the bill package signed by Newsom includes measures aimed at cutting red tape for smaller enterprises. Under AB 1693, retailer building plan approvals for tenant improvements are accelerated, while municipal authorities must issue a special permit enabling pop-up businesses to occupy empty commercial spaces for up to 120 days.
Proponents point to the state’s broader macroeconomic growth as the backdrop for these regulatory updates. Since the start of Governor Newsom’s tenure, California’s annual GDP has expanded by in excess of $1.18 trillion, attaining a level of $4.25 trillion by 2025. Economic output for the first quarter of 2026 hit an annualized figure of $4.4 trillion, building on annual GDP increases that surpassed $200 billion during each of the preceding two years.
Whether state prosecutors move quickly to test the new statute remains an open question. Legal analysts note that with the California Department of Justice already engaged in active litigation, including its ongoing antitrust case against Amazon, it could be some time before the state files its first complaint under the COMPETE Act.