California Poised to Sharpen Antitrust Enforcement with New Penalties

California continues to ramp up recent efforts to ferret out anticompetitive conduct in the Golden State through oversight and enforcement. In 2023, the state appointed an antitrust prosecutor to head up its new Division of Petroleum Market Oversight within the California Energy Commission, to act as an oil “watchdog” and investigate perceived anticompetitive and unethical conduct in the state’s energy markets. In 2024, California’s top antitrust lawyer, Senior Assistant Attorney General Paula Blizzard, announced that, after a 25-year hiatus, the state would seek to resume criminal prosecutions under its antitrust statute, the Cartwright Act. And now, in February 2025, state legislators have introduced SB-763 — a bill designed to deter anticompetitive conduct by ratcheting up the criminal and civil penalties available under the Cartwright Act.

California’s Cartwright Act generally tracks Section 1 of the federal Sherman Act.¹ Both statutes prohibit agreements that restrain trade, and conduct that violates Section 1 also tends to implicate the Cartwright Act. Accordingly, California courts often rely on the same case law that federal courts use when applying Section 1 to inform their interpretation and application of the Cartwright Act.²

While both statutes authorize criminal enforcement, one area in which the state and federal statutes differ is the maximum penalties for violations. Under the Sherman Act, individuals who violate Section 1 can be subject to a statutory maximum penalty of ten years in prison and fines of up to $1,000,000 — and this rises to $100,000,000 for corporations.³ By contrast, the Cartwright Act currently caps individual fines at $250,000 and corporate fines at $1,000,000, with imprisonment limited to three years.⁴

The newly unveiled SB-763 aims to close this gap. Under the proposed bill, the maximum statutory criminal financial penalties under the Cartwright Act would mirror its federal counterpart, allowing $100,000,000 penalties for corporations and $1,000,000 for individuals. While these would be the maximum statutory penalties, it is important to remember that both federal and California antitrust criminal violations can be subject to alternative fine calculations resulting in even higher penalties, up to twice the gain or loss from an antitrust violation. See 18 U.S.C. § 3571(d); Cal. Bus. & Prof. Code § 16755(a)(3).

Under the proposed legislation, the maximum incarceration sentence for violating the Cartwright Act would increase from three years to five years — greater than the existing three-year maximum, but still short of the Sherman Act’s possible ten years.

In addition, the proposed bill would add a new provision to the Cartwright Act (Cal. Bus. & Prof. Code § 16755.1) providing for civil penalties of up to $1 million “per violation” that courts can impose based on factors such as the nature, seriousness, persistence, length of time and willfulness of the defendant’s misconduct, as well as the defendant’s assets, liabilities, net worth and cooperation with the Attorney General. Notably, civil penalties are subject to lower standards of proof than criminal penalties.

State Senator Melissa Hurtado (D-Bakersfield) unveiled the new legislation alongside California Attorney General Rob Bonta on February 24, 2025. She emphasized that the purpose of SB-763 is to ensure “that violating antitrust laws comes with real consequences, not just a slap on the wrist.” As of February 24, the bill sat with the Senate Rules Committee, awaiting assignment to a standing committee. The likeliest candidate is the Senate Business, Professions and Economic Development Committee, whose jurisdiction includes “legislation that pertains to business, professional and trade practices, licensing and regulation” under the California Business and Professions Code.⁵

It remains to be seen whether SB-763 makes its way through committee — much less whether it passes the State Senate, State Assembly, and is signed into law. That said, antitrust enforcement has proven to be a priority in Sacramento. Attorney General Bonta’s sponsorship and vocal support of the new legislation may signal that there is significant momentum behind it. If nothing else, the bill indicates that the appetite for more robust antitrust enforcement has not yet diminished in Sacramento.

¹ William O. Gilley Enterprises, Inc. v. Atl. Richfield Co., 588 F.3d 659, 661 (9th Cir. 2009) (observing that the Cartwright Act is “California’s equivalent to the Sherman Act”).

² Vinci v. Waste Mgmt., Inc., 36 Cal. App. 4th 1811, 1814 (1995) (“Because the Cartwright Act has objectives identical to the federal antitrust acts, the California courts look to cases construing the federal antitrust laws for guidance in interpreting the Cartwright Act.”).

³ 15 U.S.C. § 1.

⁴ Cal. Bus. & Prof. Code § 16755(a).

⁵ The Cartwright Act is embedded in the California Business and Professions Code. 

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.