Council Wins Big Changes to Legislation that Threatened New Business Formation, Investment

The worst impacts of antitrust legislation (AB 1776) that threatened to chill new business formation in California and heap legal costs on new business ventures have been dramatically blunted under amendments the Bay Area Council secured with the help of a statewide coalition we organized.

The latest amendments materially improved the bill and addressed several of the coalition’s most significant concerns, particularly around private enforcement and potential litigation. A previous private right of action, which would have allowed private citizens to file lawsuits to enforce the bill, was stricken in the last weeks of session. This helped stave off the prospect of a wave of potential predatory litigation where litigants use the courts to harm market opponents.

Additionally, actionable single-form conduct was given a higher “substantial market power” standard that government prosecutors must meet to show corporate wrongdoing, rather than simple “market power.” And startups were given special protections to reduce litigation exposure for early and mid-stage startups going through IPOs or acquisitions. The changes provide a more predictable legal framework to defend pro-consumer strategies and operations. To engage in the Council’s business regulatory and technology policy work, please contact Senior Vice President Peter Leroe-Munoz.