Academic Experts Warn of Dangers in Rewriting California Antitrust Law

Twenty-five professors at California universities are urging legislators to reject a sweeping change to the state’s antitrust law, warning that pending legislation is a threat to consumers, ordinary business practices, and the overall economy.

“While we share the goal of promoting competitive markets, this proposal would constitute a severe and untested departure from established antitrust principle,” wrote the academics in a joint letter in opposition to Assembly Bill 1776 (Aguiar-Curry; D-Winters). CalChamber has identified the bill as a Cost Driver on the annual Affordability Agenda, citing its widespread impacts on California’s economic competitiveness.

The academic experts argue that AB 1776 would wrongly expose companies to the threat of litigation for “a wide range of ordinary business practices,” such as customer discount programs and actions that “often lead to lower prices, improved quality or greater innovation.”

“This bill would deter expansion, reduce job creation, and ultimately harm the very competitive dynamism the bill seeks to promote,” the professors said in the letter.

Perhaps even more troubling, the letter points out, is that both the bill and last year’s report by the California Law Revision Commission ignored the detailed analysis provided by the academic experts.

“A new standard, untethered to any framework, is not the way forward,” they wrote.

The professors who signed the letter include researchers from USC (Jonathan Barnett, Anthony Dukes, Shantanu Dutta, Milan Miric, Ziyi Qiu, Sivaramakrishnan Siddarth, D. Daniel Sokol, Guofu Tan, Sha Yang); UC Davis (Joseph Biello, Hemant Bhargava, Yueyue Fan, Panteleimon Loupos, Menesh Patel, Helen Zeng); UCLA (Hugo Hopenhayn, Marvin Lieberman); UC Berkeley (Zsolt Katona, Prasad Krishnamurthy); UC Riverside (Subramanian Balachander, Hai Che); UC Irvine (Vidyanand Choudhary); Santa Clara (Tao Li; Dongsoo Shin); and Pepperdine (Babette Boliek).