California has enacted its first general state-law prohibition on monopolization and monopsonization, adding a new public-enforcement tool to the Cartwright Act from January 1, 2027.
Governor Gavin Newsom signed Assembly Bill 1776, known as the COMPETE Act, after lawmakers narrowed an earlier proposal. The statute makes it unlawful to monopolize or monopsonize, attempt to do so, maintain such power, or combine or conspire to monopolize or monopsonize trade or commerce.
The law resembles Section 2 of the federal Sherman Act but expressly reaches monopsony, the exercise of market power against suppliers or workers rather than customers. Enforcement is reserved to California’s attorney general and district attorneys. Private plaintiffs cannot sue directly under the new provision or use an alleged violation as the predicate for a claim under the state’s Unfair Competition Law.
Newsom’s signing message supported action against conduct that harms consumers, workers and businesses but warned against drawing legitimate superior products or ordinary competitive success into the prohibition. He acknowledged that courts will have to develop the standard and that lawmakers may need to clarify it later.
The transition gives companies time to review practices that previously were assessed mainly through federal monopolization doctrine or other provisions of California law. The new provision does not itself decide whether any firm possesses unlawful market power; those questions will arise in enforcement actions brought by authorised public prosecutors.
Official California announcement
