Sacramento, CA — Ahead of a vote today by the California Law Revision Commission (“the Commission”) on sweeping reforms to California’s antitrust law – the culmination of a three-year long study initiated by the State Legislature in 2022 – the American Economic Liberties Project along with 10 other labor, consumer, and legal advocacy groups submitted a letter calling for heightened scrutiny of corporate concentration across the state.

“California may be the fifth largest economy in the world, but from Hollywood to healthcare, tech to agriculture, whole industries are at risk of succumbing to a worsening crisis of concentrated power and wealth inequality,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “As federal enforcers offer impunity to the highest bidder, California should crack down on corporations that stifle our economy by neutralizing their competitors. The California Law Revision Commission should recommend new reforms that prevents monopolization before it occurs, and which puts the burden on dominant corporations to show how further contracting the economy is consistent with a new generation of opportunity and shared prosperity.”

“It is not a coincidence that the state with the highest number of billionaires in the United States also has one of the worst and widening income gaps in the country,” Hepner added. “California’s next reckoning depends on whether private equity profiteers and monopolists will be allowed to continue draining the state of its potential while working people are clobbered by a historic affordability crisis.”

The California Law Revision Commission began its study of the state’s antitrust law in early 2023, at the direction of the State Legislature. The Commission has already voted to recommend that California adopt its own merger provisions, which would allow the California Attorney General and plaintiffs to challenge anticompetitive mergers in state court, but has yet to articulate a specific policy approach.

The letter submitted by AELP and its partner organizations recommends the Commission endorse multiple policy recommendations, including:

• An “appreciable risk” standard for preventing mergers before industries have already undergone significant concentration;
• Designation of the 2023 Merger Guidelines (developed under former Federal Trade Commission Chair Lina Khan and Department of Justice Assistant Attorney General Jonathan Kanter) as persuasive authority;
• Creating a presumption of illegality where there is evidence of serial acquisitions, or “roll-ups,” in the same or adjacent markets – a strategy common among private equity and Big Tech firms; and
• Creating a presumption of illegality when the acquiring firm is presumptively dominant – i.e., a market cap greater than $600 billion.

Finally, the letter calls on the Commission to support legislation that would provide the California State Attorney General with contemporaneous pre-merger notification of potentially anticompetitive mergers, an approach the State has already taken for the healthcare and grocer industries. To alleviate the administrative burden on the Office of the State Attorney General, the letter recommends that any such legislation include a fee-based mechanism for the office to recover costs.

In addition to Economic Liberties, the co-signatories of the letter include the California Nurses Association, Consumer Federation of California, Democracy Policy Network, Economic Security California Action, Institute for Local Self-Reliance, TechEquity Collaborative, Writers Guild of America West, UDW AFSCME Local 3930, UFCW Western States Council.

Read the full letter here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.