Protect small businesses in California from a lack of fair competition | Opinion

A small restaurant owner in Los Angeles recently told me she raised her prices again — not because she wanted to, but because her suppliers did. Meanwhile, she’s competing with a Carl’s Jr across the street, whose dollar menu makes it harder for customers to justify paying more for a handmade torta from a family business.

With little room to absorb rising costs, her prices may seem high, but they reflect what it takes to make fresh, traditional food and provide quality jobs.

California’s economy isn’t just expensive, a lack of fair competition is making it harder for small businesses to survive — which also hurts consumers and workers. That’s dangerous in a state where small business owners account for 99% of all businesses and employ roughly half the private-sector workforce.

Under current California antitrust law, it is illegal for two or more companies to engage in anti-competitive behavior. But in today’s economy, one company can have so much power that it can eliminate competition unilaterally.

Assemblywoman Cecilia Aguiar-Curry’s Assembly Bill 1776 acknowledges that anti-competitive behavior by a single, dominant company is illegal. The AB 1776, the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act, is a practical, overdue step to restore balance for small employers and crack down on anti-competitive behavior that raises costs, suppresses wages and limits opportunity for entrepreneurs.

The COMPETE Act does something simple but powerful: It makes it clear that a monopoly violates the law when engaging in anti-competitive conduct to maintain or grow its dominance. The bill does not change the standards of evidence or the enforcement mechanisms that have long been part of California law, but it does clarify that California law is not trumped by federal law.

This will align California with 34 other states that recognize the ability of one predatory company to eliminate competition. Over the past few decades, entire industries have consolidated into a few dominant players. Small Business Majority research shows 56% of small businesses say one or more large companies dominate their market, and 44% report rising monopolistic practices. This concentration is a key driver of California’s affordability crisis.

But what does that look like in real life? When one or two companies control supply chains, small businesses lose bargaining power, pay more for goods and pass costs on to other businesses — ultimately raising prices for consumers. Higher costs keep wages stagnant, while dominant firms block smaller competitors. It’s no coincidence that entrepreneurship falls as markets consolidate.

The bill doesn’t change who can file a legal challenge. It’s less about “can you sue?” and more about “can you win?” AB 1776 clarifies that existing antitrust rules apply to single-firm conduct, but it doesn’t make those cases easier to prove. A plaintiff would still have to define a market, show the defendant has monopoly power in that market, prove exclusionary conduct and demonstrate real harm. Simply opening across the street or offering lower prices doesn’t come close.

AB 1776 kicks in when a firm with real market power uses it in ways that cross the line (discriminatory pricing or restricting access to suppliers, for example). It would allow small business to compete on a similar footing with Carl’s Jr.

Without the COMPETE Act, California relies on antitrust laws largely unchanged since 1907. The act them based on recommendations from the nonpartisan California Law Revision Commission and aligns them with today’s economic realities.

Critics claim AB 1776 will burden small businesses, but the bill targets anti-competitive behavior by dominant companies — not smaller companies that are usually victims of monopolies’ anti-competitive behavior. By clarifying what’s allowed, the bill reduces disputes and legal uncertainty.

The real challenges today are unpredictable supply costs, take-it-or-leave-it contracts and limited options who they can buy or sell to. Moving beyond narrow federal antitrust rules, AB 1776 creates a clear, consistent framework for a modern economy.

Critics claim that AB 1776 could result in a rash of lawsuits, but the majority of state and federal laws allow antitrust enforcement against individual companies.

The COMPETE Act is about fairness and opportunity. It doesn’t punish success or ban monopolies, but it stops them from crushing small competitors. Today, a few dominant companies set terms and prices with no alternatives if you’re dissatisfied. Just ask yourself, how many truly small, local companies are still a part of your “main street.” Competition is disappearing, driving up costs.

AB 1776 helps small businesses thrive, boosts fair wages and lowers prices. It ensures California’s economy works for everyone — not just the biggest players.

Bianca Blomquist is the California director for Small Business Majority, a small business advocacy organization.