California’s COMPETE Act Could Halt AI Scale-Ups, Echoing 1966 Antitrust Error

California stands on the brink of a seismic shift in antitrust enforcement with Assembly Bill 1776, dubbed the COMPETE Act. The bill, presented as a modernization of state competition law, in reality proposes a wholesale abandonment of the consumer welfare standard (CWS) that has served as the lodestar of antitrust analysis for nearly five decades. Under the CWS, courts and regulators evaluate mergers and business conduct based on measurable harm to consumers—typically price increases, reduced output, or diminished quality. The COMPETE Act would scrap this objective framework and replace it with a vague mandate to protect “all trade participants,” including competitors, suppliers, employees, and would-be entrants. This radical departure threatens to plunge California’s business environment into a miasma of legal uncertainty, evoking the darkest days of pre-CWS antitrust populism epitomized by the Supreme Court’s 1966 decision in United States v. Von’s Grocery Co. The op-ed, syndicated across multiple Southern California newspapers on July 16, 2026, draws a direct parallel between the bill and the Von’s Grocery case, where the government blocked a merger of two Los Angeles grocery chains with a combined 7.5% market share—far below any level capable of exercising market power. The Court’s ruling was not grounded in economic harm but in a sentimental desire to protect “small dealers and worthy men” from the efficiencies of modern retail. Consumers, the so-called “worthy women,” had already embraced the benefits of larger supermarkets: lower prices, one-stop shopping, and innovation in frozen foods. The Court’s intervention punished those very efficiencies. Now, the COMPETE Act threatens to resurrect this reactionary philosophy, empowering judges to act as central planners, picking winners and losers based on subjective sympathies rather than sound economics. For businesses, this means the rule of law would be supplanted by the rule of judicial whim. A merger that delivers cost savings to consumers could be blocked because a competitor complains of lost market share. A vertical integration that streamlines supply chains might be condemned for harming a supplier. The chilling effect on investment, innovation, and competitive conduct would be profound. California’s economy, a global engine of technology and entrepreneurship, could see capital flight to jurisdictions with more predictable legal regimes. The op-ed’s hyperbolic title, “A return to the era of ‘worthy men’ antitrust,” underscores the perceived regression to a bygone era of protectionism. While the bill’s proponents likely aim to check perceived abuses by large tech platforms, the blunt instrument of subjective, multi-stakeholder antitrust risks ensnaring enterprises of all sizes in costly litigation. The lack of a clear standard would force companies to seek prior regulatory approval for even benign conduct, stifling the dynamism that defines the state’s economy. Forward-looking, if the bill passes, expect a torrent of private litigation as competitors weaponize the vague standard, and a flight of corporate headquarters and startups to more business-friendly states. The debate over the COMPETE Act is not merely a legal arcana; it is a struggle over the future of competition itself in the world’s fifth-largest economy.