USA – CALIFORNIA Trends and Developments Contributed by: Eric Enson and Ann Rives, Crowell & Moring LLP
Crowell & Moring LLP 515 South Flower Street, 41st Floor Los Angeles, CA 90071 USA Tel: +1 213 310 7977 Email: eenson@crowell.com Web: www.crowell.com
With growing concerns of a more lax application of antitrust law under the current Trump adminis - tration, individual states have continued to look for ways to strengthen their own antitrust regu - lations. Washington state, for example, recently became the first to enact state-level general merger review, independent of federal authori - ties, while Arkansas will now prohibit pharmacy benefit managers from owning pharmacies, eliminating what the state sees as “anti-com- petitive business tactics” . Unsurprisingly, California continues to lead the charge among states seeking to expand their antitrust authority – through potential legislation aimed at expansion of criminal enforcement, single-firm conduct and merger enforcement review at the state level. The result would be a significant overhaul of California’s antitrust law, the Cartwright Act. In addition, after vowing in 2024 to dust off the criminal provisions of the Cartwright Act to crimi - nally enforce California’s antitrust law for the first time in 25 years, the Attorney General’s Office continues to move resources in that direction, stating the Office’s intent to focus on California- based “crimes that affect [the] population direct - ly as opposed to conspiracies that maybe affect the whole nation somewhat equally” and voicing support for new legislation that would increase
Cartwright Act criminal penalties by 100-fold. Finally, the California state legislature has also drafted several bills that would vastly curtail the use of pricing software and algorithms, the enactment of which could have significant con - sequences for companies doing business in California. California Continues Pressing for Expansive Antitrust Reforms The California Law Revision Commission (CLRC), the influential body that makes recom - mendations to the California legislature, contin - ues to consider and advocate for sweeping revi - sions of California’s Cartwright Act. As directed by the legislature, the CLRC – through seven working groups, made up of volunteers, includ - ing antitrust professors, practising attorneys and economists – has studied and reported on three main questions. The first is whether California law should be revised to prohibit monopolies in a fashion similar to federal law, given that the Cart - wright Act currently does not apply to unilateral conduct. The second question is whether the law should be revised with respect to technology companies so that the analysis of “antitrust inju- ry” is far broader and may include consideration of all sorts of alleged harms, not just increased prices and diminished competition. And third, the CLRC is evaluating whether to propose revi - sions to the law that would empower the Califor -
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