On May 27, 2026, the California State Assembly passed AB 1776 by a vote of 44 – 17, with 19 members not voting or absent. The bill, also known as the COMPETE Act, is now in the Senate Judiciary Committee, where it has been amended twice. AB 1776 would reshape California antitrust law by adding express prohibitions on monopolization and monopsonization to the Cartwright Act and declaring that interpretations of federal antitrust law are “at most instructive, and not conclusive.”
AB 1776 must pass the Senate and, if amended, be reapproved by the Assembly. It would then move to Governor Newsom’s desk where it would need to be signed on or before September 30 to take effect January 1, 2027.
Summary of AB 1776
As previously discussed in the Client Memorandum we issued in May, AB 1776 would add prohibitions to the Cartwright Act on monopolization while emphasizing that federal antitrust interpretations are only instructive, not controlling. The bill also focuses on free and fair competition for all market participants, expressly including workers and labor markets, and requires courts to interpret the Cartwright Act broadly to deter anticompetitive conduct.
- Free and fair competition; labor market focus. The bill says that the Cartwright Act is intended to protect free and fair competition for all market participants, including workers and consumers. It expressly treats labor-market competition as part of competition policy. Courts must broadly interpret California antitrust law to promote free and fair competition and maximize deterrence.
- Unreasonable restraints of trade; monopolization. The bill prohibits one or more persons from unreasonably restraining trade or engaging in monopolization or monopsonization, including attempts, maintenance or combinations and conspiracies to do so.
- Federal law instructive but not conclusive. The bill states that “[i]nterpretations of federal antitrust laws are at most instructive, and not conclusive, when construing California’s antitrust laws.”
- Exemptions. The bill provides exemptions for small businesses (qualifying small businesses that are independently owned and operated, California-based, have California-domiciled officers and meet the 100-employee and $10 million gross-receipts thresholds) and for exclusive franchises authorized by state law and supervised by a local governmental agency.
Recent Legislative History/Changes to the Bill
- Passed by the Assembly. On May 27, 2026, the state Assembly passed AB 1776, on a vote of 44 ayes, 17 noes and 19 members not voting or absent. The bill needed 41 votes to pass.
- Amendments in the Senate. The bill was referred to the Senate Judiciary Committee on June 10, 2026, and has been amended twice in recent weeks. The most significant amendments are:
- While the bill still says that interpretations of federal antitrust law are at most instructive, the list of federal antitrust precedents that were not necessary to find liability (e.g., termination of a prior course of dealing) has been removed from the current version of the bill.
- Buttressing the language that federal antitrust law interpretations are instructive only, the bill now says that any claim brought under the bill “shall not be dismissed or rejected on the pleadings or merits pursuant to the Sherman Act or any case decided thereunder unless the court also finds that such a dismissal or rejection is consistent with this chapter.”
- As described above, there is an additional exemption for exclusive franchises granted by state law and supervised by localities.
Next Steps
- There is a Senate Judiciary Committee hearing set for June 30, 2026.
- If the bill is passed by the Senate in amended form, any amendments will need to be voted on by the Assembly.
- Governor Newsom would have to sign the bill on or before September 30 for the bill to become law effective January 1, 2027. He has not given any public indication of his views on the bill.
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