CalChamber to Senate Committee: Reject Risky Antitrust Plan

The California Chamber of Commerce, along with a large and diverse coalition representing key parts of the state’s economy, is urging the state Senate Appropriations Committee to reject one of the year’s most costly bills that seeks to radically reshape antitrust law in the Golden State.

Led by CalChamber, the coalition wrote on July 31 to the committee in opposition to Assembly Bill 1776 (Aguiar-Curry; D-Winters), pointing out the proposal is “out of step with state and federal antitrust standards and modern economic thinking” and imposes changes that would prove economically devastating to a broad array of vital California industries.

The letter to lawmakers comes on the heels of CalChamber launching a multimillion-dollar public awareness advertising campaign to raise awareness of what AB 1776 could do to California’s economy.

The new letter lays out five of the most damaging impacts of the bill, which has been labeled a Cost Driver as part of CalChamber’s annual Affordability Agenda:

• The bill allows antitrust claims against companies that have what it calls “substantial market power,” an untested legal threshold that is lower than the standard in federal law.
• AB 1776 would incentivize plaintiffs’ attorneys to file lawsuits challenging common business practices — due, in part, to the bill’s relaxed pleading standards and provisions related to attorneys’ fees and treble damages.
• There would be more litigation sparked by heightened uncertainty about what is, and isn’t, lawful competitive conduct. That will trigger higher costs for businesses and consumers.
• Courts would be prohibited from examining the impacts of a company’s behavior across multiple consumer markets, forced instead to focus only on the impacts in a single market — thus prohibiting an analysis of anticompetitive practices that has guided the courts for decades.
• AB 1776 offers no meaningful protection for small businesses, whose owners will still face the specter of lawsuits and expenses before invoking any of the legal exemptions the bill’s author insists will shield these entrepreneurs.

The letter reaffirms one of the most consistent problems as the bill has made its way through the legislative process: a lack of any economic evidence or cost-benefit analysis that demonstrates California’s current antitrust laws are inadequate.

Read the letter here.