Assembly Approves Cost Driver Bill Rewriting California’s Antitrust Law

Last week, the California Assembly passed a California Chamber of Commerce- opposed bill to rewrite the state’s antitrust law.

CalChamber identified the bill, AB 1776 (Aguiar-Curry; D-Winters), as a Cost Driver, pointing to its widespread impacts on California’s economic competitiveness.

In a news release issued shortly after the bill’s passage, CalChamber said it was “disappointed that the Assembly has chosen to move ahead with AB 1776, a bill that would upend some 130 years of durable and fair antitrust protections while exposing California businesses of all sizes to unchecked legal liabilities and a steady stream of frivolous lawsuits.”

CalChamber went on to note that AB 1776 “fails one of the basic tests of any good bill: It offers no clear, objective standard on how a business can comply with the law. Far too many provisions of the bill rely on subjective standards that can only be defined through litigation — a crippling cost for businesses that are the heart and soul of California’s innovation economy.”

Without objective standards, CalChamber continued, “AB 1776 will create a chill to the pro-competition conduct of startup firms and the service providers on whom they rely.

“The late amendments to the bill have not offered any meaningful rules about how a business can structure its conduct to avoid participating in an unlawful single-firm restraint of trade.

“We welcome conversations with legislators in the coming weeks about ways to ensure California antitrust law requires the kind of competition on which consumers rely. AB 1776, however, fails to meet that goal.”

The Assembly approved AB 1776 on May 27 on a vote of 44-17. The bill awaits assignment to a policy committee in the Senate.