Assembly Member Aguiar-Curry introduces AB 325 to strengthen Cartwright Act enforcement

In a move aimed at strengthening antitrust enforcement in California, Assembly Bill 325 was introduced by Assembly Member Cecilia Aguiar-Curry on January 27, 2025. This legislation seeks to amend the existing Cartwright Act, which governs unlawful restraints of trade, by simplifying the requirements for filing complaints and addressing the use of pricing algorithms that may stifle competition.

The bill proposes that complaints regarding violations of the Cartwright Act need only demonstrate the plausibility of a contract or conspiracy to restrain trade, rather than requiring detailed factual allegations that exclude independent actions. This change is intended to lower the barriers for consumers and businesses to bring forth antitrust claims, potentially leading to increased scrutiny of anti-competitive practices.

A significant provision of AB 325 is its prohibition against the use or distribution of pricing algorithms that utilize nonpublic competitor data. This aims to prevent companies from engaging in anti-competitive behavior through sophisticated pricing strategies that could manipulate market conditions. The bill establishes presumptions that could hold defendants accountable if they distribute such algorithms with the intent to influence pricing among competitors.

The introduction of this bill has sparked discussions among stakeholders. Proponents argue that it is a necessary step to protect consumers and promote fair competition, especially in an era where technology and data play a crucial role in business operations. Critics, however, express concerns about the potential for overreach and the implications for businesses that rely on data analytics for pricing strategies.

Economically, the bill could have significant implications for California's business landscape. By making it easier to challenge anti-competitive practices, it may foster a more competitive market environment, benefiting consumers through lower prices and increased choices. However, businesses may face heightened scrutiny and compliance costs, which could impact their operational strategies.

As the legislative process unfolds, AB 325 will likely undergo further debates and amendments. Its passage could mark a pivotal shift in California's approach to antitrust enforcement, reflecting a growing emphasis on protecting competition in an increasingly complex marketplace. Stakeholders will be closely monitoring the bill's progress, as its outcomes could reshape the regulatory landscape for businesses operating in the state.