The question of whether California’s free market is competitive enough or if new regulations are needed is being examined by a state commission. This issue may lead to legislation in 2025. The California Legislature passed ACR 95 in August 2022, directing the California Law Revision Commission (CLRC) to study antitrust law topics and enforcement.
The California Chamber of Commerce has been involved in this process, advising against new legislation unless there is a proven need for a separate legal framework. They emphasize the importance of conducting a cost-benefit analysis before implementing significant proposals.
Working groups have been tasked with examining various aspects of antitrust issues, such as the regulation of single firms and industrial concentration levels in California. CalChamber has argued against regulating single firms separately, suggesting that this approach does not differentiate between competitive and non-competitive practices.
A recent report from NERA challenges a key argument regarding the “monopoly problem” in California. The report criticizes the idea that “industrial concentration” serves as an indicator of monopoly power, stating it is misleading and ineffective for guiding antitrust policy.
Experts at NERA assert that industrial concentration trends should not influence antitrust policy because they do not inherently reduce competition or harm consumers. Additionally, the Motion Picture Association released a report disputing claims that the audiovisual sector lacks competitiveness due to concentration.
NERA’s findings indicate no evidence supports claims that U.S. industrial concentration has reached harmful levels or serves as an accurate measure of monopoly power. The authors warn against basing policy decisions on unverified claims about increasing concentration, which could negatively impact both California and U.S. economies.
