Lawmakers Reject Flawed Effort to Rewrite California’s Antitrust Law

A California Senate committee has rejected a deeply flawed plan to change the state's antitrust laws, one that would trigger sweeping consequences for businesses and consumers alike and was identified as a Cost Driver on CalChamber's annual Affordability Agenda.

Senate Bill 1074 (Wiener; D-San Francisco) sought to legislate the design of technology platforms in ways that its supporters argued would level the digital playing field. But CalChamber and a coalition of business sector opponents made clear that the bill would have a chilling effect on the development of new platforms designed to meet the demands of California consumers and small businesses.

And while backers suggested that SB 1074 would only prohibit conduct that could disadvantage users or rivals, provisions of the bill would impose extensive obligations that dictate product design choices and force successful platforms to share valuable assets and intellectual property with rivals.

"The fundamental problem is that SB 1074 presumes that ill-defined categories of conduct are anti-competitive unless a platform clearly proves otherwise," said Julian Kleinbrodt, an attorney representing the business coalition that includes CalChamber.

The bill largely mirrored the American Innovation and Choice Act (AICOA), a federal bill that failed in Congress in 2022 and was opposed by prominent California congressional leaders, concerned about its effect on the Golden State's economy and global technological leadership.

CalChamber and others pointed out that rival companies could weaponize the provisions in SB 1074 to make wide-ranging demands of covered platforms. Settling private lawsuits from rival companies would be especially difficult. Government enforcers, and courts, may have to scrutinize those future settlements - leading to additional litigation over the settlements themselves. And contrary to the goals of the bill, SB 1074 would elevate the interests of current competitors above the interests of users, consumers, and the future of dynamic competition.

Meanwhile, CalChamber continues to oppose AB 1776 (Aguiar Curry; D-Winters), another bill aiming to radically revise state antitrust law. That bill is pending before the Assembly Appropriations Committee.