California Law Revision Commission Votes To Propose Expansive Changes to California’s Antitrust Laws

Over the last year, the California Law Revision Commission (“CLRC”), the influential body that makes recommendations to the legislature, has been considering sweeping reforms to California’s antitrust law, the Cartwright Act. Recently, the CLRC voted to propose several changes to the Cartwright Act aimed at expanding the reach and scope of the law. Companies doing business in California should pay close attention to this ongoing process because of the potentially dramatic impact such new state laws could have, including increased exposure to antitrust litigation. Crowell & Moring is representing the California Chamber of Commerce (“CalChamber”) in monitoring, analyzing and responding to the CLRC’s recommendations.

In its January 23, 2025 meeting, the CLRC considered various recommendations from its staff that were published just ten days before the hearing. The Commission was unanimous in the view that the Cartwright Act should be amended to regulate single-firm conduct, given that the Cartwright Act currently applies to concerted action only. The CLRC was also unanimous that such a law should not merely mirror Section 2 of the federal Sherman Act, which prohibits monopolization and attempts to monopolize, but should instead be “California specific.” The Commission was split, however, on whether to adopt a European-like abuse of dominance standard, which was previously rejected by the “Single-Firm Conduct Working Group” that the CLRC empowered to study the issue. Ultimately, based on concerns about the “baggage” associated with the term “abuse of dominance,” the Commission agreed to empower staff to draft a proposed law that would outlaw single-firm “misuse of market power,” which is a standard that has never been interpreted or analyzed by any court in the United States.

The Commission also voted to draft a new law creating California’s own merger approval and premerger notification laws. Not only that, the CLRC directed staff to consider a new standard for evaluating harm in merger reviews that is lower than that required under federal law in order to make California challenges easier. The CLRC justified these moves based on concerns that federal scrutiny of mergers is likely to be lax under the Trump administration and that California has its own unique interests when it comes to mergers.

The CLRC, however, decided not to propose new California antitrust laws aimed specifically at “Big Tech.” The Commission stated that any new laws adopted will be broad enough and flexible enough to encompass all companies doing business in California, including tech companies. 

If adopted into law, these proposals will be a radical departure from the existing antitrust regime in California. The sheer novelty of the laws may chill competition and innovation, could subject even small companies to significant liability and will make it more difficult and costlier to do business in California. And litigation will almost certainly increase. The CLRC will hold hearings throughout 2025 and could submit proposed legislation to the California Legislature by the end of the year. 

As counsel for CalChamber, Crowell & Moring is advising on the import and effect of the CLRC’s work. If you are interested in joining CalChamber’s coalition seeking to ensure that any reforms to California law are common sense reforms, or want to hear more about this important, ongoing legal development, please contact any Crowell lawyer listed below.