California antitrust law is governed primarily by the Cartwright Act, which prohibits agreements between two or more parties that restrain trade, including price fixing, bid rigging, market allocation, and group boycotts. Violations carry criminal fines up to $1 million for individuals and $6 million for corporations, prison terms up to three years, and civil penalties up to $1 million per violation in government enforcement actions. Private plaintiffs who prove injury recover three times their actual damages plus attorney’s fees. The penalty increases took effect January 1, 2026 under Senate Bill 763.
What the Cartwright Act Prohibits
The core prohibition sits in Section 16720 of the California Business and Professions Code, which defines an illegal “trust” as a combination of capital, skill, or acts by two or more persons to restrict trade, limit production, prevent competition, or control prices.1Justia. California Business and Professions Code 16720-16728 Any contract that violates the Act is automatically void.
Certain agreements between competitors are treated as per se illegal, meaning the court will condemn them without weighing whether they actually hurt the market. California’s civil jury instructions confirm that horizontal combinations among competitors at the same level of distribution are “ordinarily illegal per se.”2Justia. Judicial Council of California Civil Jury Instructions – CACI No. 3400 The categories most often prosecuted:
- Price fixing. Competitors cannot agree to set, raise, lower, maintain, or stabilize prices. The ban reaches any term that affects what a buyer pays, including discounts, financing, and delivery charges. Whether the agreed price was reasonable is irrelevant.
- Bid rigging. Competitors coordinate bids so the “winner” is predetermined. This shows up most often in government procurement and construction.
- Market allocation. Competitors divide up territories, customer segments, or product lines so each one faces no competition in its assigned area.
- Group boycotts. Competitors agree to refuse business with a particular company or person, usually to push them out of the market or force terms on them.
Size does not matter. A handshake between two local businesses dividing neighborhoods is as much a violation as a secret deal between large companies.
Vertical Restraints and Where California Is Stricter Than Federal Law
Agreements between businesses at different levels of the supply chain, such as a manufacturer and a retailer, are called vertical restraints. Most are evaluated under the “rule of reason,” which weighs anticompetitive harm against legitimate business justifications. Tying arrangements and exclusive dealing contracts fall into this category: not automatically illegal, but unlawful when they substantially reduce competition.
Resale price maintenance is the sharpest divergence between California and federal law. When a manufacturer dictates the minimum retail price a downstream seller must charge, federal courts analyze that arrangement under the rule of reason after the U.S. Supreme Court’s 2007 decision in Leegin Creative Leather Products v. PSKS.3Justia. Leegin Creative Leather Products, Inc. v. PSKS, Inc. California never adopted that change. Under Mailand v. Burckle (1978), vertical price fixing remains per se illegal in California.4Justia. Mailand v. Burckle A manufacturer who sets minimum resale prices for California distributors faces automatic liability under state law even when the same arrangement would survive federal scrutiny.
Who Can Sue and What They Can Recover
Any person or business injured by an antitrust violation can file a private lawsuit under Section 16750. A successful plaintiff recovers three times actual damages, plus interest and reasonable attorney’s fees.5California Legislative Information. California Code Business and Professions Code 16750 The treble-damages multiplier and fee-shifting make these cases viable even when individual losses are modest.
California also lets indirect purchasers sue, which federal law generally does not. After the U.S. Supreme Court’s 1977 Illinois Brick decision limited federal antitrust suits to direct purchasers, California’s legislature amended Section 16750 to let anyone injured sue “regardless of whether such injured person dealt directly or indirectly with the defendant.”5California Legislative Information. California Code Business and Professions Code 16750 A consumer who paid inflated retail prices because of a manufacturer-level price-fixing conspiracy can sue the manufacturers directly, even though the consumer never bought from them. Most large consumer antitrust class actions in California rest on this provision.
Government Enforcement and Penalties
The California Attorney General and county district attorneys can bring both civil and criminal actions under the Cartwright Act.6Justia. California Business and Professions Code 16754 Public enforcers can also seek injunctions and orders restoring competitive conditions.
Criminal Penalties
Every Cartwright Act violation is classified as a criminal conspiracy against trade. SB 763, effective January 1, 2026, sharply increased the fines:7California Legislative Information. California Code Business and Professions Code 16755
- Individuals face up to $1 million in fines, up from $250,000, along with one, two, or three years in state prison, or up to a year in county jail, or both a fine and imprisonment.
- Corporations face up to $6 million per violation, up from $1 million.
- If the violation produced financial gain or caused financial loss, the court can impose a fine equal to twice the gross gain or twice the gross loss, whichever is greater, when that amount exceeds the standard caps.
The gain-based alternative is what gives the statute real reach against large conspiracies. A company that made $50 million from a price-fixing scheme faces potential criminal fines of $100 million, well above the $6 million cap.
Civil Penalties
SB 763 also added a civil penalty of up to $1 million per violation in actions brought by the Attorney General or a district attorney. Courts weigh the nature, seriousness, and persistence of the misconduct when setting the amount. These civil penalties are separate from and in addition to criminal fines, injunctions, and any damages owed to private plaintiffs.
Deadlines to Prosecute or Sue
Criminal prosecution must begin within four years after the last act forming part of the violation.7California Legislative Information. California Code Business and Professions Code 16755 The “last act” language matters because antitrust conspiracies often unfold over years. As long as at least one overt act occurred within the four-year window, the entire conspiracy can be prosecuted.
Private civil suits run on the same four-year clock, but the clock may not start at the moment of the violation. Antitrust conspiracies are often secret, and courts recognize a discovery rule and fraudulent concealment doctrine that can delay the start of the limitations period until the plaintiff knew or should have known about the injury. If defendants actively concealed their conduct, plaintiffs typically have the full four years from the date they discovered it.
The Unfair Competition Law as a Companion Claim
California’s Unfair Competition Law, Section 17200, prohibits any “unlawful, unfair or fraudulent business act or practice.”8California Legislative Information. California Code Business and Professions Code 17200 Because a Cartwright Act violation is by definition unlawful, any antitrust claim automatically supports a parallel UCL claim. The UCL adds restitution and injunctive relief, which can be useful when provable damages are small but the defendant’s revenue from the conduct was large. It also catches business practices unfair to competition that fall short of a Cartwright Act violation because no agreement between two or more parties exists. Plaintiffs routinely plead both.
Noncompete Agreements Are a Separate Rule
Section 16600, in the same division of the code as the Cartwright Act, voids virtually every noncompete agreement in employment. It declares that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”9California Legislative Information. California Code Business and Professions Code 16600 The legislature has told courts to read the provision broadly to void any noncompete in employment no matter how narrowly written, and the rule applies even when the employee is not a party to the restrictive contract. This is not technically an antitrust provision, but it reflects the same policy: California favors open competition over agreements that restrict it.