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A California lawmaker scaled down her bill to let the “little guy” sue big business, and the compromise helped her anti-monopoly proposal reach Gov. Gavin Newsom’s desk.
Assembly Bill 1776, nicknamed the Compete Act, was the subject of hot debate throughout the legislative session, pitting powerful consumer groups and unions against the state’s Chamber of Commerce and biomedical companies, including drugmakers.
If approved by the governor, it would allow the attorney general of California and district attorneys to sue individual businesses for using what bill backers view as unfair tactics to strangle their competition. Under California’s existing antitrust law, the Cartwright Act, those suits can currently only be taken against multiple businesses acting together.
The bill “is a strong step forward for antitrust enforcement and helps our public enforcers take on monopoly behavior while protecting our workers, consumers, and small businesses,” said the bill’s author, Democratic Majority Leader Cecilia Aguiar-Curry, an assemblymember from Davis.
Aguiar-Curry argued the bill was necessary because of significant consolidation among businesses since the late 1990s. She modeled the bill after recommendations issued this year by the Legislature’s California Law Revision Commission, which conducted a three-year study to determine whether the Cartwright Act, passed in 1907, needed updates in the 21st century.
Sen. Angelique Ashby, a Democrat from Sacramento, argued that consolidation leads to higher prices for businesses and consumers.
“Here in Sacramento, our independent venues struggle to compete in a world where only a few companies control platforms,” she said. “Across the state, our independent bookstores are being undercut by massive chains. Restaurants have fewer suppliers and pay higher prices for things” such as ingredients and silverware, she added.
Both houses approved the measure with no debate and little fanfare: the Senate with a 30-9 vote and the Assembly with a 55-15 vote. The majority of Republicans opposed the bill.
Consumer advocates, unions and small business organizations supported the bill, arguing it would prevent large employers from crushing competition and keeping workers’ wages low. Despite the erosion of the bill’s powers, a coalition of the groups declared a win Sunday, when the bill passed out of the Senate.
“What is going to the governor is a bill that lets California’s attorney general and district attorneys go after the dominant corporations that block competitors, squeeze out small businesses, suppress wages, and drive up prices,” said Teri Olle, vice president of Economic Security California Action, an advocacy group that campaigns for stronger antitrust laws.
California’s powerful Chamber of Commerce, which represents nearly 12,000 businesses, made eroding Aguiar-Curry’s bill its No. 1 priority this session.
“We think it’s very, very, very, very flawed and dangerous,” said Ben Golombek, the Chamber’s head of policy during a panel discussion in August.
The group had placed the bill on its annual “Cost Drivers” list, and placed billboards outside of the Capitol calling out Aguiar-Curry by name. In the final weeks of session, it launched a seven-figure digital and broadcast ad campaign railing against the measure.
How much the measure would cost the state is still up in the air. That uncertainty is part of the reason the state’s Department of Finance was opposed to the bill.
The department’s legislative director, Christian Beltran, said the price tag would be dependent on how many cases the attorney general might choose to take up – costs that might not be covered by two dedicated accounts set up for antitrust litigation: the Unfair Competition Law Fund and Attorney General Antitrust Account.
The concern might be warranted: California Attorney General Rob Bonta has emerged as a willing fighter against anticompetitive practices and corporate consolidation, most recently leading the charge against Paramount Skydance’s purchase of rival media juggernaut Warner Bros. Discovery.
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