Executive Summary
- What’s new: On August 13, 2026, California’s Senate Appropriations Committee advanced Assembly Bill 1776, the COMPETE Act, to the full Senate. The committee amended the bill’s new single-firm conduct provisions to remove the private right of action that would have allowed private plaintiffs to sue under those additions, instead limiting enforcement to actions by the attorney general or a district attorney. The Appropriations Committee also amended the bill on August 3, 2026, to incorporate several substantive narrowing changes discussed at the earlier Senate Judiciary Committee hearing.
- Why it matters: If enacted, AB 1776 would broaden California’s antitrust regime beyond its current focus and may subject businesses to liability for conduct that has long been considered lawful under federal antitrust law. The bill could also make it easier for state AGs or district attorneys to bring antitrust claims based on California law and take them to trial.
- What to do next: Companies with a significant market presence in California should continue to monitor this bill closely and evaluate their pricing, distribution and other competitive strategies accordingly.
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On August 13, 2026, the California Senate Appropriations Committee voted 5-2 to advance Assembly Bill 1776 — the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act — to the full Senate. As we previously highlighted, AB 1776 would amend and significantly expand the Cartwright Act, California’s principal antitrust law, by extending it to include single-firm conduct.
The committee’s vote followed an August 10, 2026, hearing at which the bill was placed on the committee’s suspense file for fiscal review. The vote also occurred after significant amendments adopted on August 3, 2026, narrowed the bill’s scope in several respects.
At the August 13 suspense hearing, the Appropriations Committee made a critical change: It removed the private right of action for the new single-firm provisions, limiting enforcement to public prosecutions by the attorney general or district attorneys. Private plaintiffs retain the ability to bring suits under existing Cartwright Act provisions. The bill must now pass the full Senate before proceeding to Gov. Gavin Newsom’s desk.
August 3 Amendments Narrow the Bill’s Scope
On August 3, 2026, the author, Assemblymember Cecilia Aguiar-Curry, submitted amendments to incorporate several narrowing changes that she previewed during the June 30, 2026, Senate Judiciary Committee hearing (which we recently discussed). These amendments address core elements of the bill’s substantive framework:
- Narrowed core prohibition. The bill’s central prohibition was refined from broadly prohibiting conduct that would “unreasonably restrain trade or monopolize or monopsonize” to specifically prohibiting any person from “monopolizing or monopsonizing” any part of trade or commerce. This focuses the new single-firm provisions more squarely on monopolizing conduct.
- Heightened market power standard. The government must now allege and prove “substantial” market power through direct or indirect evidence, rather than simply “market power.” This raises the threshold for establishing a viable claim under the bill, although the exact definition will be left for California courts to decide.
- Affirmation of lawful competition. The amendments added a legislative finding that a business may lawfully obtain and maintain market power or monopoly power through superior products, services or business acumen. This codifies the federal antitrust law principle that merits-based monopoly power remains permissible.
- Procompetitive justifications confined to the same market. The bill now expressly notes that procompetitive justifications should be evaluated in the same relevant market as the challenged conduct. Earlier language would have prohibited offsetting anticompetitive effects in one market with benefits in another market and made no mention of evaluating procompetitive justifications in the same relevant market as the challenged conduct.
- Revised relationship to federal antitrust law. The amendments provide that federal antitrust interpretations are now “at most instructive” when construing California antitrust law, replacing earlier language that they were “at most instructive, not conclusive.” A separate provision that barred dismissal of a claim under the COMPETE Act based on federal antitrust law was also deleted. These changes could permit California courts to give more weight to federal decisions when ruling on Cartwright Act claims subject to the bill.
- Broadened exemptions. The amendments expanded the carve-out for exclusive franchises, contracts, licenses or permits from those authorized by state law and granted by a local governmental agency to those granted and supervised by any local, state or federal governmental agency. A new carve-out was also added for conduct that is required or authorized under state or federal law when that conduct is granted and supervised by a governmental agency. The amended bill further clarifies that it does not impose liability for conduct within the scope of authority granted by covered franchises, contracts, licenses or permits.
August 10 Appropriations Committee Hearing and Fiscal Concerns
At the August 10, 2026, Senate Appropriations Committee hearing, the California Department of Finance voiced its opposition to the bill, raising significant fiscal concerns. The department indicated that the bill could create potentially significant costs for the Unfair Competition Law Fund and the Attorney General Antitrust Account, the accounts used by the attorney general to investigate and prosecute antitrust violations. A key cost driver is the uncertain volume of cases the attorney general would litigate under the new single-firm authority. The Department of Finance further noted that extending antitrust liability to single firms may significantly increase the number of cases filed, which would require additional funding, could increase court backlogs and could create pressure on California’s General Fund.
During the hearing, the bill was moved without objection to the committee’s suspense file — a procedural mechanism that allows additional time for fiscal review of a bill’s budgetary implications before the committee’s biannual suspense hearing.
August 13 Suspense Hearing: Advancement and Removal of the Private Right of Action
At the August 13, 2026, suspense hearing, the Senate Appropriations Committee advanced AB 1776 to the full Senate. The most significant development from the hearing was that the committee amended the bill to limit the new single-firm provisions to public prosecutions, removing the private right of action that would have permitted private parties to bring suit under the bill’s expanded monopolization framework.
This amendment addresses a central point of controversy throughout the bill’s legislative history. During the June 30, 2026, Senate Judiciary Committee hearing, multiple senators expressed concern that the private right of action could generate excessive litigation, and some questioned whether the government should be the sole enforcement authority for the new provisions. With this change, private plaintiffs retain the ability to sue under existing Cartwright Act provisions but cannot bring claims under the new single-firm conduct sections.
Aguiar-Curry expressed disappointment about the removal of the private right of action but characterized the bill’s advancement as an important step, stating that the legislation presents “an opportunity to make California’s economy more competitive, more innovative, and more open to everyone.”
Impact and Next Steps
If enacted, AB 1776 would broaden California’s antitrust regime beyond its current focus and may subject businesses to liability for conduct that has long been considered lawful under federal antitrust law. The bill could also make it easier for California’s state attorney general or a district attorney to bring antitrust claims based on California law and take them to trial.
AB 1776 must now pass a vote by the full California Senate before advancing to Newsom’s desk. The bill must be signed by September 30, 2026, to take effect on January 1, 2027. Although Democrats hold a supermajority in the California Legislature, passage is not assured given the continued opposition from business groups and the Department of Finance. Newsom has not publicly stated a position on the bill, though his administration has generally supported the state’s antitrust enforcement efforts.
The legislation presents ongoing legal risk and uncertainty for businesses with a significant California presence. Companies should continue to monitor the bill’s progress and evaluate their competitive strategies — including pricing, distribution and other market practices — in anticipation of a potential expansion of California’s antitrust enforcement framework.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.