California's COMPETE Act Targets Monopolies Starting 2027
California's COMPETE Act banning monopolization takes effect January 1, 2027.
Why it matters: California's new COMPETE Act reshapes antitrust enforcement in the state's massive economy, affecting counsel advising companies with California ties. It empowers state prosecutors to challenge monopolistic and monopsonistic conduct previously unaddressed under state law.
- Signed into law September 30, 2026, by Governor Gavin Newsom.
- Takes effect January 1, 2027, amending the Cartwright Act.
- Prohibits single-firm monopolization and monopsonization under state law.
- Enforcement limited to California Attorney General and district attorneys.
On September 30, 2026, California Governor Gavin Newsom signed into law the COMPETE Act (Assembly Bill 1776), which takes effect January 1, 2027. This law significantly changes the state's competition policy by amending the Cartwright Act to explicitly prohibit single-firm anticompetitive conduct, including both monopolization and monopsonization (California AG Office, Baker McKenzie).
Previously, California's Cartwright Act addressed anticompetitive behavior involving multiple firms but did not cover harmful conduct by single firms, resulting in reliance on federal laws like the Sherman Act for monopoly issues. The COMPETE Act fills this gap by providing state-level tools to challenge monopolistic and monopsonistic conduct by sole entities (Morrison & Foerster).
Enforcement under the COMPETE Act is exclusively by the California Attorney General and district attorneys; it does not create a private right of action (Cozen O'Connor). To prove a violation, prosecutors must establish that the defendant holds "substantial market power," although the statute does not define this term, potentially causing interpretative challenges in application (Baker McKenzie).
The Act also directs California courts to regard federal antitrust decisions as instructive rather than binding and directs a liberal interpretation of California’s antitrust laws. Governor Newsom emphasized the intention to penalize clear wrongdoing without creating business uncertainty, while Attorney General Rob Bonta highlighted the importance of vigorous enforcement to protect California's economy (California AG Office).
By the numbers:
- September 30, 2026 — Date COMPETE Act was signed into law
- January 1, 2027 — COMPETE Act takes effect
- 2 — Enforcement authorities limited to California Attorney General and district attorneys
Yes, but: The COMPETE Act does not define 'substantial market power,' leaving ambiguity around enforcement thresholds.