Sacramento, CA  — The California legislature gave final approval to the COMPETE Act (AB 1776) over the weekend, and many are hailing it as a landmark win against monopoly power. It isn’t. After a heavy, big-budget campaign by the California Chamber of Commerce, amendments adopted in the final days of the session stripped the bill of its private right of action — a key enforcement mechanism —  carved back the authority of public enforcers, and gutted the reach of California’s Unfair Competition Law. While the bill does close a century-old loophole in California antitrust law, it leaves Californians almost no way to use it.

The American Economic Liberties Project, which helped craft the COMPETE Act from the ground up over nearly four years, withdrew its support over the weekend and formally changed its position to “oppose unless amended.” In response to the bill’s passage, Economic Liberties issued the following statement: 

“AB 1776 was supposed to be California’s long-overdue answer to monopoly power. Instead, in the final days of session, it was hollowed out under pressure from the Chamber of Commerce,” said Nidhi Hegde, Executive Director of the American Economic Liberties Project. “Stripping the private right of action and carving into the Unfair Competition Law isn’t a compromise, it’s a step backwards dressed up as reform. If enacted, California would be trading real enforcement for the illusion of it. That’s why, despite years of investment and work with the Majority Leader, Economic Liberties has regretfully withdrawn its support. We remain committed to building a real antimonopoly agenda in California, not one negotiated with corporate interests.”

“Recent changes to the COMPETE Act threaten to leave Californians worse off than the status quo,” said Pat Garofalo, director of state and local policy at the American Economic Liberties Project. “California had the opportunity to enact a landmark antimonopoly law that put power directly in the hands of the consumers, workers, and small businesses harmed by corporate abuse. Instead, the bill that passed leaves enforcement to the discretion of a single elected official, the budget priorities of a governor, and the willingness of judges to entertain defense arguments these amendments invite by carving into the state’s broader Unfair Competition Law. It isn’t just a compromise on a new bill, it’s now a rollback of existing law.”

“We have invested years in this effort and remain deeply grateful to Majority Leader Aguiar-Curry for her leadership,” Garofalo continued. “But we cannot pretend a bill that has been hollowed out is a victory. A private right of action is not negotiable in antitrust reform. It is the line between a law that works and a law that merely exists.”

How the Bill was Hobbled 

The COMPETE Act was gutted earlier this month when the Senate Appropriations Committee adopted a hostile amendment that struck the private right of action and narrowed public enforcers’ authority. The amendment followed a “multi-million dollar effort” by the California Chamber of Commerce, launched in July, to defeat the bill, which included a seven-figure advertising blitz over the summer. According to second-quarter lobbying filings, Big Tech spent over $8 million in the first half of 2026 to influence Sacramento, with the CalChamber accounting for $3.8 million spent.

The Chamber did not kill the COMPETE Act. It did something more useful to its members: it left the bill standing and removed the part that made it enforceable.

What We Lost 

Private Enforcement: Without a private right of action, consumers, workers, and businesses have no avenue to hold illegal monopolies accountable under the new law. Enforcement falls exclusively to the Attorney General and district attorneys, whose budgets are constrained and whose priorities are subject to electoral and political pressure. And because public enforcers cannot recover damages on behalf of businesses, the bill now contains no mechanism for financially compensating the small businesses monopolies harm most directly. 

If signed as written, California would join Arkansas as one of only two jurisdictions, federal or state, whose antimonopoly law bars private parties from enforcing it, moving in the opposite direction from Delaware, which updated its law in 2024 to allow private enforcement.

The stakes are not hypothetical. Historically, around 90% of federal antitrust cases have been brought by private plaintiffs. Before the 2020 monopolization case against Google, the federal government went nearly a quarter century without bringing a major case under Section 2 of the Sherman Act, the federal analog to the COMPETE Act. 

California’s own recent experience makes the same point: since the state passed the Preventing Algorithmic Price Fixing Act (AB 325) last year with a private right of action intact, consumers have sued a network of gas stations for allegedly coordinating prices through pricing software. Despite industry warnings of a flood of frivolous litigation, that suit appears to be the only enforcement action under the law to date.

Narrowed Public Enforcement: Under California’s existing antitrust law, the Attorney General can bring actions on behalf of public agencies, localities, and everyday Californians. The amended COMPETE Act appears to bar the Attorney General from bringing claims on behalf of public agencies, cities, counties, and other political subdivisions, and to rescind the AG’s parens patriae authority to act on behalf of Californians broadly. The result is that communities would have less protection against single-firm monopoly conduct under the new law than under the 1907 Cartwright Act.

A Carve-Out from the Unfair Competition Law: A late amendment also carves single-firm conduct claims out of California’s Unfair Competition Law, one of the most durable sources of accountability for Californians harmed by unlawful and unfair business practices. Defendants will argue that claims once available under the UCL can now be brought only by public enforcers, with no path for harmed businesses to be made whole. The carve-out also sets a precedent corporate interests will demand in every future consumer- and worker-protection bill.

An Invitation to Cross-Market Balancing: The amendments removed the bill’s prohibition on cross-market balancing, opening the door for monopolists to defend abusive conduct in one market by pointing to purported benefits in another. Its removal leaves California’s legislative history on worse footing than the federal Sherman Act.

Background

Backed by a widespread coalition of consumer and antitrust advocates, labor, small businesses, and trade associations, the COMPETE Act began as a long overdue attempt to bring California back to its innovative, and competitive roots.

California’s Cartwright Act, its core antitrust law passed in 1907, does not prohibit “illegal monopolization” conduct by a single firm to harm competition. In fact, California is one of only five states in the country without such a prohibition. The “single firm conduct loophole” means that when challenging anticompetitive conduct, like Live Nation’s bundling of its venue and ticketing businesses, or Google’s exclusive control over distribution of its search engine, Californians are forced into federal courts and made vulnerable to the narrowed scope of federal antitrust laws.

In a recent case brought by the State of California against Amazon, which alleged conduct that pressured third-party sellers to hike prices across non-Amazon retail channels or risk being de-platformed, for example, Amazon exploited the single firm conduct loophole to argue that its conduct was outside the reach of the Cartwright Act.

The COMPETE Act was grounded in a three-year study by the nonpartisan California Law Revision Commission, informed by dozens of antitrust experts, economists, and practitioners, including government enforcers and defense counsel for Fortune 500 companies.

Previous amendments to the bill had explicitly exempted approximately 98% of California businesses, focusing the bill’s reach on the largest firms with the market power to inflict competitive harm.

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