AB 1776: Cartwright Act Expansion to Single Firms Could Spike Litigation and Cost 1.6M Jobs

For antitrust practitioners, AB 1776 represents a seismic shift in California law. By extending the Cartwright Act to single-firm actions and discarding predatory pricing requirements, the bill would fundamentally alter litigation dynamics, potentially turning every price cut or product launch into a lawsuit.

California is facing a moment of economic reckoning, with the nation’s highest unemployment rate, mounting private-sector job losses, and stagnating consumer spending. The California Center for Jobs & the Economy has warned of deep structural problems that could push the state into extended decline. Against this backdrop, Assembly Majority Leader Cecilia Aguiar-Curry has introduced Assembly Bill 1776, the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act, a radical antitrust reform that critics say is exactly the wrong medicine for an ailing economy. By one estimate, the bill could eliminate up to 1.6 million jobs within a decade, accelerating the exodus of employers and talent.

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The California Center for Jobs & the Economy has warned of deep structural problems that could push the state into extended decline.

The COMPETE Act makes two fundamental changes to California’s antitrust law, each of which dramatically expands litigation risk for firms doing business in the state. First, it extends the Cartwright Act—originally enacted to police coordinated conspiracies like price-fixing or collusion—to cover the actions of a single firm. Under current law, the Cartwright Act only reaches agreements between two or more entities. AB 1776 would allow regulators and private plaintiffs to challenge unilateral conduct, such as a company’s decision to cut prices, launch a new product, or enter a new market. Second, the bill rewrites key thresholds that distinguish pro-competitive strategy from anticompetitive conduct. Most notably, it would permit a rival to sue over cost cuts without ever demonstrating that those cuts were predatory—a standard that federal antitrust law has long required to prevent precisely the kind of chilling effect on competition that this bill would create.

The op-eds argue that these changes are not mere technical adjustments but a fundamental shift that would turn California’s courts into weapons for business disputes. A firm that lowers prices to attract customers, even if it remains profitable and intends only to compete, could face costly litigation from a competitor that feels threatened. The uncertainty would force companies to consult lawyers before making ordinary business decisions—pricing, product launches, geographic expansion—slowing innovation and raising costs. Startups, which often rely on aggressive pricing to gain a foothold against incumbents, would be especially vulnerable. The authors note that this is occurring just as the state is hemorrhaging private-sector jobs, a warning that additional regulatory burdens could tip the balance toward an exodus of capital and talent to more business-friendly states.

The bill’s proponents claim it will promote “free and fair competition,” but the analysis from the California Center for Jobs & the Economy starkly contradicts that framing. The state’s structural economic problems—high taxes, energy costs, and regulatory density—are already weighing on business investment. Adding a novel and ambiguous antitrust standard, critics contend, would only deepen the malaise. The 1.6 million job-loss projection, though derived from a single estimate, underscores the stakes: a decline of that magnitude would devastate state tax revenues, consumer spending, and community vitality.