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California Antitrust Overhaul Lands on Newsom’s Desk

By  |  August 31, 2026
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California could give state prosecutors greater power to challenge the behavior of dominant companies under legislation awaiting Gov. Gavin Newsom’s decision, marking a potential shift in how the state pursues competition cases.

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    The proposal, AB 1776, cleared the California Legislature and was sent to the governor after a largely party-line vote, according to Bloomberg Government. The publication reported that Newsom has not indicated publicly whether he intends to approve the measure.

    At the center of the legislation is a change to California’s Cartwright Act. Existing antitrust cases under the statute have generally focused on agreements or coordinated behavior involving multiple businesses. AB 1776 would create a basis for public authorities to pursue certain conduct by a company acting independently, according to Bloomberg Government’s reporting.

    That distinction could matter in markets dominated by a small number of powerful businesses. Rather than requiring authorities to establish coordination between companies, the legislation would broaden the circumstances in which prosecutors could examine whether a single firm has improperly used its market position.

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    Supporters have sought to frame the measure as a safeguard against abuses of economic power rather than a penalty on companies simply for becoming large or successful. Assembly Majority Leader Cecilia Aguiar-Curry, a Democrat, said businesses that prevail because they offer better products or outperform competitors should be able to benefit from that success, according to Bloomberg Government.

    The legislation was narrowed during negotiations before reaching Newsom.

    Bloomberg Government separately reported that lawmakers removed provisions that had drawn objections from business groups. Those changes included language dealing with cross-market balancing and the way competitive advantages and potential harms would be weighed in an antitrust analysis. The core proposal to expand the Cartwright Act to cover certain unilateral conduct remained in the bill, according to the publication.

    The debate places Newsom between advocates of stronger state competition enforcement and business interests concerned about expanding the circumstances under which companies can face antitrust scrutiny.

    His decision could also carry significance beyond Sacramento. California’s economic size means changes to its competition rules can influence how companies assess legal risk and business practices even when they operate nationally.

    Newsom has until Sept. 30 to act on the measure, Bloomberg Government reported. He can sign it, veto it or permit it to take effect without his signature.

    Source: Bloomberg Government