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California antitrust law is about to change dramatically — and if your business operates anywhere in Los Angeles County, San Bernardino County, Riverside County, or Orange County, you need to know about this now. California Assembly Bill 1776, the COMPETE Act, cleared the Senate Appropriations Committee on August 14, 2026. A full California Senate floor vote must happen by August 31, 2026. If it passes, Governor Newsom has until September 30, 2026 to sign or veto. Signed? It takes effect January 1, 2027. That’s not far off. Whether you’re running a business in West Covina, Los Angeles, Anaheim, Ontario, Pomona, Riverside, or San Bernardino, this affects you. Our team at Tez Law P.C. is telling every California business client the same thing right now: schedule your antitrust compliance review before the governor makes his move. Don’t wait.
What Is the COMPETE Act? Background and What This Means for California Law
AB 1776 — the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy Act — was introduced in March 2026 by Assembly Majority Leader Cecilia Aguiar-Curry. It’s built on draft legislation the California Law Revision Commission developed after more than three years of independent study. Legal analysts across the political spectrum are calling it the most sweeping rewrite of California antitrust law in over a hundred years. That’s not hype. That’s the reality your business is facing.
Here is the core of what AB 1776 does:
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- Extends the Cartwright Act to single-firm conduct. California’s Cartwright Act, on the books since 1907, currently targets coordinated conduct between two or more companies — think price-fixing, bid-rigging, and market-allocation schemes. AB 1776 would extend it to cover what a single company does entirely on its own, including unilateral pricing decisions, refusals to deal, and restrictions on distribution, even if no other company is involved in the scheme.
- Prohibits monopolization and monopsonization. The bill would create state-law liability for monopolization, attempted monopolization, maintenance of monopoly power, and monopsonization by a single firm — conduct that has historically been governed only by federal law under Section 2 of the Sherman Act.
- Decouples California law from federal antitrust precedent. AB 1776 expressly states that federal antitrust case law is “at most instructive, not conclusive” when construing California’s antitrust laws, and limits the ability of California courts to dismiss state antitrust claims based on federal case law. This means businesses cannot rely on their federal compliance track record as a shield in California courts.
- Eliminates market-share thresholds. Unlike the federal Sherman Act, which applies only to businesses with substantial market power, AB 1776 lacks a market-share threshold — meaning businesses of all sizes could face scrutiny for conduct previously considered lawful.
- Directs courts toward liberal construction. The bill requires courts to liberally interpret California’s antitrust laws to best promote free and fair competition, tilting the scales in favor of plaintiffs bringing antitrust claims.
The bill passed the California State Assembly on May 27, 2026, by a vote of 44–17, then cleared the Senate Judiciary Committee 9–2 on June 30, 2026, before advancing to Senate Appropriations. Despite opposition from more than 100 California business organizations led by the California Chamber of Commerce — which designated the bill a “Cost Driver” — and over $6 million in lobbying spend by major tech companies and industry allies, the bill has continued to advance rapidly through the legislature.
How AB 1776 Affects California Businesses in Southern California
If you operate a business anywhere in Los Angeles, San Bernardino, Riverside, or Orange County, this law could directly reshape your legal exposure. Here is who faces the greatest urgency:
Technology and Platform Companies
Businesses in platform-based markets — app developers, SaaS providers, e-commerce marketplaces, digital advertising platforms — are in the direct crosshairs of AB 1776. Conduct such as self-preferencing (promoting your own products over competitors’), algorithmic pricing, or restricting third-party integrations could now be challenged as unlawful single-firm restraints of trade under California law, even if that same conduct is permissible under federal antitrust standards.
Distributors, Wholesalers, and Manufacturers
Companies that use exclusive dealing arrangements, territorial restrictions, or minimum resale price maintenance agreements need to take note. Under this bill, unilateral pricing decisions, refusals to deal, and restrictions on distribution made by a single company could constitute a violation, particularly if they are found to disadvantage a rival. Businesses in Ontario’s logistics corridor, the Inland Empire’s distribution hubs, and the Port of Los Angeles supply chain ecosystem should be especially alert.
Healthcare, Food, and Housing Industry Operators
AB 1776 was introduced, in part, in response to consolidation across major industries — including food, healthcare, and housing — that supporters argue has driven up costs for Californians. Healthcare providers, pharmacy chains, grocery distributors, and property management companies in Southern California should anticipate increased scrutiny of their pricing practices and market relationships.
Small and Mid-Size Businesses
Proponents note that the bill targets only unlawful conduct by dominant firms and preserves legitimate competitive practices such as discounts and price matching. However, the absence of a defined market-power threshold in the bill’s text means that businesses cannot assume they are too small to be affected. Any company whose pricing or distribution conduct could be argued to harm a competitor faces elevated legal risk in a post-AB 1776 environment.
Employers and Labor Markets
The bill explicitly includes protections for workers’ freedom to choose employment, prohibiting anticompetitive business practices that impede worker mobility. This implicates no-poach agreements, non-compete clauses (already heavily restricted in California), and wage-fixing arrangements in Southern California labor markets.
What Your Business Should Do Right Now
With the Senate floor vote deadline of August 31, 2026, and a gubernatorial signing deadline of September 30, 2026, the window for proactive compliance is narrow. Here are the immediate steps every California business should take:
- Schedule an antitrust compliance audit. Have experienced business law counsel review your current pricing strategies, distribution agreements, exclusive dealing contracts, and supplier relationships for potential exposure under AB 1776’s new single-firm conduct standard.
- Audit your market position. Even if you believe you are not a “dominant” firm, document your market share analysis now. If the bill passes without a clear threshold, you will want this documentation ready to defend against potential claims.
- Review refusal-to-deal and exclusivity arrangements. Any contracts or policies that restrict who you do business with — or on what terms — could be challenged. Identify and assess these arrangements before January 1, 2027.
- Evaluate your labor practices. Review any no-poach agreements, labor market sharing arrangements, or policies that could be characterized as restricting worker mobility, as these are expressly targeted by the bill’s worker-protection provisions.
- Do not assume federal compliance means California compliance. This is perhaps the most critical point. Because AB 1776 expressly decouples California antitrust analysis from federal precedent, a clean federal antitrust record does not guarantee protection from California liability under the new law.
- Monitor the governor’s desk. Even if the bill passes the Senate before August 31, Governor Newsom’s position has remained publicly uncommitted. Track developments through September 30 and be prepared to act swiftly upon signing.
If you have questions about any of these steps, request a free consultation with Tez Law P.C. today.
Why Choose Tez Law P.C. for Your Business Law Needs in Southern California
At Tez Law P.C., headquartered in West Covina, California, Managing Attorney JJ Zhang (CA Bar #326666) and our business law team serve clients across Los Angeles County, San Bernardino County, Riverside County, and Orange County — including businesses in West Covina, Los Angeles, Anaheim, Ontario, Pomona, Riverside, and San Bernardino.
We understand that California’s rapidly evolving legal landscape does not wait for convenient timing. Whether your business needs an urgent antitrust compliance review in light of AB 1776, help navigating a commercial dispute, assistance with business formation and contract drafting, or guidance on the intersection of business and immigration services for your workforce, Tez Law P.C. delivers focused, practical legal counsel from a team that knows Southern California business law inside and out.
We also serve clients who have suffered harm because of another party’s negligence — if you or a family member has been injured and needs a trusted personal injury attorney in the West Covina area, our team is ready to help.
What sets Tez Law P.C. apart:
- Deep knowledge of California antitrust, business litigation, and commercial law
- Bilingual legal services (English and Mandarin Chinese) serving diverse Southern California communities
- Responsive, client-centered communication — we return calls and emails promptly
- Transparent fee structures with free initial consultations
- Conveniently located in West Covina, serving clients throughout the San Gabriel Valley, Inland Empire, and Greater Los Angeles
Frequently Asked Questions About California AB 1776 and the COMPETE Act
What is California AB 1776 and why does it matter for my business?
California AB 1776, known as the COMPETE Act, would make the most sweeping changes to California’s antitrust law — the Cartwright Act — in more than a century. It extends antitrust liability to single-firm conduct, meaning your business could face legal claims for pricing decisions, distribution restrictions, or market strategies that no other company is involved in. It also explicitly decouples California law from federal antitrust precedent, so complying with federal antitrust rules is no longer sufficient protection in California. If the bill is signed by the governor before September 30, 2026, it takes effect January 1, 2027 — leaving businesses very little time to adjust their operations and contracts.
Does AB 1776 only apply to large technology companies like Apple or Google?
No. While large tech platforms are frequently cited in legislative debates about AB 1776, the bill’s text does not limit its application to any particular industry or company size. Unlike the federal Sherman Act, AB 1776 does not require proof that a firm has achieved a specific market share threshold to face liability. This means businesses of all sizes operating in California — from regional distributors and healthcare providers to mid-size manufacturers and professional service firms — could be exposed to antitrust claims under the new law. If your business makes unilateral pricing decisions, uses exclusive dealing contracts, or restricts how products are distributed, you should have an attorney review your practices before January 1, 2027.
What is the timeline for AB 1776, and what happens after the Senate votes?
As of August 20, 2026, AB 1776 has passed the Senate Appropriations Committee and is heading to a full California Senate floor vote that must occur no later than August 31, 2026. If the bill passes the Senate in an amended form, it must also be re-approved by the California State Assembly before going to the governor. Governor Gavin Newsom then has until September 30, 2026, to sign or veto the measure. If signed, the law takes effect January 1, 2027. Businesses should not wait until after the governor acts — antitrust compliance reviews, contract audits, and distribution agreement updates take time, and starting now gives you the best protection regardless of the final outcome.
The clock is running. California AB 1776 represents a genuine inflection point in the legal risk environment for every business operating in Southern California — and the window to act proactively is closing fast. Whether you need an immediate antitrust compliance audit, a review of your distribution and pricing contracts, or simply want to understand what this new law means for your specific situation, the business law team at Tez Law P.C. is ready to help. Contact us today for a free consultation and let us help you get ahead of January 1, 2027, before it is too late.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Contact Tez Law P.C. at 626-678-8677 or [email protected] for advice specific to your situation. Results may vary.