Cartwright Act: violations.

The bill text was re-rendered from a traditional legislative print format (with line numbers, page headers, and column layout) into a web-based HTML format with navigation menus, version selection dropdowns, and a 'Date Published' timestamp. No statutory language was added, removed, or altered.

Section 16730(d) now explicitly provides that a claim under Section 16731 shall not be dismissed or rejected on the pleadings or merits pursuant to the Sherman Act or any case decided thereunder unless the court also finds such dismissal is consistent with the new chapter. This is a stronger protection than the prior version, which only said federal case law was 'not binding' and could be considered as 'persuasive authority.'

Section 16732 removes the opening statement that listed factors 'may constitute evidence of a violation of Section 16731.' The section now only states that the listed items are 'not required to find liability,' removing the affirmative language that they could be used as evidence.

Section 16731(a)(1) removes the broad definition of 'restraint of trade' that included any actions cognizable under Section 16720 (the general trust/restraint provision). It is replaced with the simpler phrase 'unreasonably restrain trade,' narrowing the scope of what falls under this prohibition.

Section 16732(g) removes the phrase 'or has market power' from the indirect evidence market share threshold provision, slightly narrowing when this factor applies.

Section 16731(c) now requires courts to use the 'analytical framework and guidance' (not just 'guidance') from In re Cipro Cases I & II, with specific page citations added (146-147), making the required analytical approach more precise.

Section 16732(d) adds clarification that qualitative evidence may be used to prove harm to competition or actual harm, not just quantitative evidence. The prior version only stated that proof 'must be entirely proven with quantitative evidence' without this qualification.

The content of former Section 16733 (requiring courts to liberally interpret California antitrust laws) appears to have been consolidated into Section 16732, leaving Section 16733 as an empty placeholder section.

Plaintiffs must now prove 'substantial market power' rather than simply 'market power,' raising the evidentiary threshold for bringing a successful claim under Section 16731(d).

Section 16731(b) is narrowed: the same-relevant-market requirement now applies only to procompetitive justifications (rather than to both anticompetitive effects and procompetitive justifications), and clarifies that the relevant market is the one in which the allegedly unlawful conduct occurs.

New Section 16730(f) affirms that a business may lawfully obtain and maintain market power or monopoly power through the superiority of its products, services, or business acumen, providing a legislative safe harbor for legitimate competitive success.

Section 16731(a)(2) is revised from prohibiting acts that 'monopolize or monopsonize' to prohibiting acts that cause 'every person to monopolize or monopsonize,' potentially expanding liability to cover conduct that causes third parties to gain monopoly power.

The exemption in Section 16731(f) is expanded from covering only exclusive franchises granted by local governmental agencies to also covering those granted by state or federal governmental agencies, and adds a new exemption for conduct required or authorized pursuant to state or federal law supervised by any level of government.

Section 16730(d) contains what appears to be a drafting error, changing 'instructive, not conclusive, when construing' to 'instructive, not conclusive, instructive when construing,' duplicating the word 'instructive.'

Section 16731(a) no longer prohibits 'unreasonably restrain trade' as a standalone violation. The prohibition is now limited to monopolizing or monopsonizing, attempting to do so, maintaining a monopoly or monopsony, or combining/conspiring to monopolize or monopsonize any part of trade or commerce.

The exemption in Section 16731(f)(1)(A) was broadened: it now covers exclusive franchises, contracts, licenses, or permits granted and supervised by a local, state, or federal governmental agency (previously limited to those 'authorized by state law' and supervised by a 'local governmental agency').

New Section 16731(g) provides that an action under this section may be initiated only by the Attorney General or a district attorney, eliminating any private right of action for the new monopolization/monopsony provisions.

New Section 16731(h) designates any action brought under Section 16731 as a complex case under subdivision (a) of Section 3.400 of the California Rules of Court, which affects case management and scheduling.

Section 16730(d) no longer contains the provision that a claim under Section 16731 shall not be dismissed or rejected on the pleadings or merits pursuant to the Sherman Act unless the court also finds such dismissal consistent with the chapter. This removed a procedural safeguard against federal antitrust preemption arguments.

Old Section 16732 was deleted entirely. It had stated that interpretations of federal antitrust laws are 'at most instructive, and not conclusive' when construing California antitrust laws, and it listed eight specific conditions (a through h) that are NOT required to find liability, including: prior course of dealing for refusal-to-deal claims, below-cost pricing or recoupment likelihood for predatory pricing, the 'no economic sense' test, quantitative evidence requirements, multisided platform harm analysis, rival efficiency comparisons, federal market share thresholds, and relevant market definitions for direct evidence of market power.

The legislative digest removed language stating the bill 'would prohibit the harm to a person or persons from the challenged conduct from being offset by purported benefits to another person or persons,' eliminating the cross-person offset prohibition that had appeared in the prior version's description.

New subsection (f) added to Section 16731 creates an exemption: the section does not prevent, limit, or prohibit exclusive franchises, contracts, licenses, or permits authorized by state law that are granted and supervised by a local governmental agency, nor does it impose liability on persons acting within the scope of such authority. 'Local governmental agency' is defined to include a city, county, special district, sanitation district, or joint powers agency.

A new small business exemption was added to Section 16731. A small business is defined as an independently owned and operated business with its principal office in California, officers domiciled in California, 100 or fewer employees (including affiliates), and average annual gross receipts of $10 million or less over the three years prior to filing the complaint.

A new requirement was added that a plaintiff bringing an action under Section 16731 must allege and, to prevail at trial, prove market power through either direct or indirect evidence.

Courts adjudicating claims under Section 16731 are now required to use the guidance of the California Supreme Court as described in In re Cipro Cases I & II (2015) 61 Cal.4th 116, which establishes a rule-of-reason analysis.

The evidence provision previously stated that harm to competition 'must be proven with quantitative evidence.' It now states harm 'is entirely proven with quantitative evidence, where qualitative evidence may be used to prove harm to competition or actual harm,' effectively allowing qualitative evidence as a supplement.

A new subsection was added to Section 16730 stating that interpretations of federal antitrust laws are at most instructive, not conclusive, when construing California's antitrust laws. A similar statement was also added to the introductory language of Section 16732.

Section 16732 evidence categories were restructured with qualifiers: refusal-to-deal evidence now applies 'when alleging an anticompetitive refusal to deal,' predatory pricing evidence applies 'when alleging predatory pricing,' the market share threshold applies only 'when relying on indirect evidence to show market power,' and the relevant market definition applies only 'when using direct evidence to show market power.'

Assembly Member Bonta and Senator Cortese were added as coauthors.

The purpose statement in Section 16730 was revised to reference 'the Cartwright Act' more broadly rather than listing specific section numbers, and added a citation to Clayworth v. Pfizer for the concept of competition.

The amendment to Section 16720 redefining 'trust' to include combinations by 'one or more persons' (instead of '2 or more persons') has been deleted entirely. This means the existing Cartwright Act trust definition remains unchanged, and the bill no longer retroactively expands what constitutes a 'trust' under the current statute.

The bill title changed from 'An act to amend Section 16720... An act to add Sections 16730, 16731, 16732, and 16733' to simply 'An act to add Sections 16730, 16731, 16732, and 16733,' reflecting that the bill is now purely additive rather than also amending existing law.

Section 16730(a) now references 'Sections 16731, 16732, and 16733' instead of just 'Sections 16731 and 16732,' incorporating the new judicial interpretation section into the stated purpose.

Two new coauthors (Assembly Members Bains and Lee) were added to the bill.

Section 16731 makes it unlawful for one or more persons to monopolize or monopsonize (or attempt, maintain, or conspire to do so) in any part of trade or commerce, expanding beyond the original bill which only addressed restraint of trade through combinations.

Section 16731 requires that anticompetitive effects and procompetitive justifications be evaluated within the same relevant market, prohibiting defendants from offsetting harm in one market with purported benefits in a separate market or to different persons.

The original amendment to Section 16720 changing 'two' to 'one or more persons' in the trust definition is retained but renumbered as a separate section within the bill's structure, and is now accompanied by the four new sections that build on it.

Section 16732 lists ten conditions (including unilateral conduct altering prior dealings, below-cost pricing, multisided platform harm, predatory pricing recoupment, and rival efficiency comparisons) that may constitute evidence of a violation but explicitly states none are required to establish liability.

Section 16730 establishes that the Cartwright Act is broader than the federal Sherman Act, that federal case law is not binding on California courts (only persuasive), and that protecting competition includes protecting workers' freedom to choose employment from anticompetitive business practices.

Section 16733 requires courts to liberally interpret California antitrust laws to best promote free and fair competition and to favor maximizing effective deterrence of violations, citing Clayworth v. Pfizer.