California Lawmakers Propose Tougher Penalties for Antitrust Violations

California legislators are moving to significantly increase penalties for companies and individuals found guilty of violating the state’s antitrust laws. A newly introduced bill, SB 763, seeks to raise the maximum criminal fine for corporate offenders from $1 million to a staggering $100 million, according to Bloomberg.

The proposed legislation, introduced in the state Senate by Democratic Senator Melissa Hurtado, aims to strengthen the enforcement of California’s Cartwright Act. The law, which has been in place for over a century, serves as a key tool for the state’s attorney general in prosecuting antitrust cases. It has previously been used in legal actions against major corporations such as Amazon.com Inc. and energy trading firm Vitol, per Bloomberg.

If passed, SB 763 would not only increase penalties for corporations but also impose stricter consequences on individuals involved in antitrust violations. The bill proposes raising individual fines from $250,000 to $1 million per violation. Additionally, it would extend the possible prison sentences for offenders from a maximum of three years to a range of up to five years.

Currently, under the Cartwright Act, violations by corporations are punishable by a fine of up to $1 million or an amount tied to the financial harm caused. Individuals convicted under the act face a combination of fines and imprisonment, with sentences ranging from one to three years. The proposed bill would escalate these penalties significantly, in an effort to deter anti-competitive business practices.

According to Bloomberg, the legislation also introduces an additional civil penalty of $1 million for any person, corporation, or business entity that breaches the law. If enacted, the bill would impose a state-mandated local program, as it increases the maximum prison term an individual could serve in a county facility.

California’s Constitution requires the state to reimburse local agencies and school districts for certain mandated costs, and statutory procedures are in place to handle such reimbursements. The financial implications of these changes are expected to be closely examined as the bill moves through the legislative process.

Source: Bloomberg