California Advances Bill to Expand Antitrust Enforcement Law
A major expansion of California’s antitrust laws advanced in the state legislature Thursday despite opposition from business leaders and some government officials.
The state Senate Appropriations Committee moved the bill, AB 1776, to the full chamber, where it must pass before it moves to Gov. Gavin Newsom’s desk. Newsom, a Democrat, hasn’t publicly offered his opinion on the measure.
A spokesperson for the governor’s office didn’t immediately respond to a request for comment, and neither did the bill’s sponsor, Assembly Majority Leader Cecilia Aguiar-Curry, a Democrat.
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The measure is part of a push by states to strengthen antitrust and competition laws. Washington, Colorado, New York, Pennsylvania and others have sought amendments to make it easier to challenge mergers or other forms of anticompetitive conduct.
If the California measure passes, it would be easier for the state attorney general to pursue monopolization cases against technology giants in the state, which is home companies including Apple Inc., Alphabet Inc. and Nvidia Corp.
The bill would extend the state’s Cartwright Act to cover conduct by individual companies, a shift from its current focus on anticompetitive conduct by two or more companies.
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In moving to the full senate, the bill was amended to “limit the actions to public prosecutions,” Senator Sabrina Cervantes, a Democrat who chairs the appropriations committee, said during the hearing. That removes an earlier provision allowing private citizens to sue under the new additions to the law. Californians can bring private lawsuits under the existing provisions of the law.
Business groups including the California Chamber of Commerce have been outspoken in their opposition. The state’s Department of Finance is also opposed, saying the attorney general’s office “indicates this bill may create unknown but potentially significant costs,” if it leads to additional antitrust investigations and lawsuits.
However, consumer advocates and labor unions — an influential force in California’s capitol — have supported the bill, arguing it would give the state more tools to crack down on anticompetitive business practices they contend are raising prices and shortchanging workers.
Newsom has though supported the state’s antitrust enforcement efforts, and the newly passed budget for the current fiscal year includes about $14.3 million in funding for antitrust litigation by the state attorney general’s office.
Top photo: The California State Capitol building in Sacramento, California, on Wednesday, July 7, 2021. Photographer: David Paul Morris/Bloomberg.