What are the two new bills and why are they significant?

On October 6, 2025, Governor Gavin Newsom signed into law California Senate Bill No. 763 (SB 763), effective January 1, 2026, which increases the maximum corporate criminal antitrust penalties in California to $6 million and provides for new civil penalties of up to $1 million in cases brought by the California attorney general. The new criminal and civil antitrust penalties represent a $5 million and $1 million increase, respectively, for antitrust violations. The increased fines serve as an increased deterrent for antitrust violations. Furthermore, since 2024, Senior Assistant Attorney General (AAG) for Antitrust Paula Blizzard has mentioned in statements that California intends to bring criminal antitrust enforcement actions in the near future, reviving its criminal program after 25 years. These increased fines may further assist California in seeking higher fines for these intended cases.

The same day, Governor Newsom also signed California Assembly Bill No. 325 (AB 325), effective January 1, 2026. The law adds a section to the Cartwright Act prohibiting use or distribution of common pricing algorithms as part of an agreement with another or to coerce another to set or adopt recommended prices or commercial terms recommended by the algorithm. This law comes on the heels of the Department of Justice Antitrust Division’s case against a real estate pricing aggregator and several property managers, alleging that the property managers used an algorithmic pricing service collectively to fix prices for rental properties. Also signed at the same time were several other laws seeking to protect renter rights, as California seeks to address rising rental prices.

AB 325 was designed to strike at the heart of the conduct at issue in the antitrust division’s litigation against the real estate pricing aggregator, in which the State of California joined as a named plaintiff. In fact, Doha Mekki, who was previously the acting AAG for the antitrust division (and principal deputy AAG during the majority of the Biden administration, which brought the litigation), provided testimony in support of the California bill, specifically mentioning that AI collusive practices can be used to align pricing in housing. A press release announcing passage of AB 325 also disclosed the intent behind the bill to close “loopholes in California’s Cartwright Act that let corporations use pricing algorithms to secretly coordinate prices, which raise costs for essentials like rent, groceries, and housing.”

What else is happening with California’s antitrust laws?

At the direction of the California Legislature in 2022, the California Law Revision Commission (CLRC) began undertaking an antitrust law study meant to address four potential pathways for modernizing California antitrust law. One of the pathways focuses on whether the state’s antitrust law should be revised to “outlaw monopolies by single companies as outlawed by Section 2 of the federal Sherman Act.”

In the almost three years since, the CLRC has signaled that it intends to formally recommend what it calls the Enhanced Single Firm Conduct Provision (Enhanced SFC Provision) for adoption by the California Legislature. On September 18, 2025, the CLRC elected to move forward with the Enhanced SFC Provision and plans to vote on a “draft tentative recommendation” to the California Legislature at its December 4 meeting. The most recent publicly available draft language of the provision provides that it is “unlawful for one or more persons to act, cause, take or direct measures, actions, or events (1) In restraint of trade or (2) To monopolize or monopsonize, to attempt to monopolize or monopsonize, to maintain a monopoly or monopsony, or to combine or conspire with another person to monopolize or monopsonize in any part of trade or commerce.” This provision is the CLRC’s compromise between two other expansive draft options. All three proposals have included some intent to ensure that the provision is more expansive than existing “restrictive” federal jurisprudence.

The Enhanced SFC Provision would codify existing federal Sherman Act Section 2 language in California’s Cartwright Act and add an illegal monopsonization offense – incorporating a new “restraint of trade” element and including interpretive guidance that likely broadens the proposed provision beyond federal principles of antitrust law and existing federal antitrust jurisprudence for Sherman Act Section 2. Specifically, the term restraint of trade encompasses the enumerated list of prohibited restraints of competition in Section 16720 of the California Business and Professions Code but also expands beyond that specific list of illegal practices. Furthermore, the proposal contains language that the statute should be interpreted “reflecting California’s laws, preferences, and priorities,” which is intended to require California courts to liberally construe the Enhanced SFC Provision to serve California’s preference – as stated by the CLRC – for maximizing deterrence of antitrust violations. The proposal also intends to make explicit that the Enhanced SFC Provision is not bound by federal case law. This broad proposal appears to be in line with the CLRC’s stated goal of maximizing deterrence of antitrust violations in the state.

Recent proposed and enacted updates to California antitrust law

The CLRC’s development of its formal proposal continues in the background as California makes other major updates to its antitrust laws, which also appear to address the goal of increased deterrence. Although SB 763 and AB 325 are set to take effect on January 1, 2026, the CLRC is still accepting public comments throughout the duration of its iterative antitrust study process. Several trade associations, think tanks, and even individual commenters have submitted thoughts on the SFC proposal and the antitrust study at large.

If you have a question about the California antitrust law updates or wish to comment on the likely forthcoming changes to California antitrust law, please contact one of the lawyers listed below.