California takes aim at monopolies with proposed antitrust law reform

No California statute deals expressly with monopolization or attempted monopolization by one powerful company. That may soon change.

California's primary antitrust statute is the Cartwright Act. Broadly, the Cartwright Act prohibits contracts, combinations and conspiracies that unlawfully restrain trade in California. Unlike the federal antitrust laws--i.e., Section 2 of the Sherman Antitrust Act--it does not prohibit conduct by a single firm to monopolize, exclude competitors or cause other anticompetitive harm. It focuses only on conduct involving "two or more persons."

But in 2022, the state Legislature tasked the California Law Revision Commission with recommending proposed reforms to the Cartwright Act. The CLRC responded by launching Study B-750, and created eight expansive working groups to identify perceived gaps in the Cartwright Act on: (1) the lack of analog to the Sherman Act on single firm conduct; (2) whether California should establish a mergers and acquisitions notification framework like the Hart-Scott-Rodino Act; (3) concerted action and existing statutory language that limits certain types of claims, such as tying; (4) potential shortcomings of the "consumer welfare standard"; (5) unique challenges posed by the business models of large technology platforms; (6) areas needing legislative guidance to clarify differences between the Cartwright Act and federal antitrust law; (7) concentration and competition in key California sectors (including labor, food and agriculture, and healthcare); and (8) mitigating purported risks posed by AI and pricing algorithms.

Initial reports have been drafted and issued, followed by public meetings and comments. The single firm conduct working group is now the first to issue its tentative recommendation, released in December 2025.

If passed in line with the recommendations, this legislation would make significant departures from federal elements required for a Section 2 claim. Indeed, the report is explicit that not only should a new provision on single firm conduct be tailored to California's needs and priorities, but it should not be bound by "particularly restrictive" federal precedents. As such, the proposal includes a list of elements from various federal antitrust laws that would be unnecessary to establish liability in California. For example, proposed subdivision (j) obviates the need to define a relevant market if direct evidence of market power exists. This change could significantly lower the barrier to bringing suits; economists needed for relevant market definition are costly, and smaller competitors can be foreclosed from challenging otherwise anticompetitive conduct. Subdivision (i) allows for antitrust claims with lower market share thresholds (e.g., 20% market foreclosure), whereas federal law typically requires a share of 50% or more to establish monopoly power. The recommendation specifically addresses monopsony, highlighting application to all buyer-side transactions. It also imposes a prohibition on cross-market efficiencies, meaning defendants could not argue that anticompetitive effects in one market from challenged conduct are offset by purported benefits in another.

These are significant changes. Both the federal and state antitrust statutory frameworks were developed in the late 1800s and early 1900s. Today, the vertical integration of California's largest industries and the scale of the digital marketplace and technology platforms present unique challenges to healthy competition. Changes that acknowledge the landscape of today's economy are long overdue and have the power to give state antitrust enforcement real teeth after a prolonged period of focus on federal enforcement.

The views expressed are solely those of the author and do not necessarily reflect the views of the firm.

Itak Moradi is an associate at Joseph Saveri Law Firm.