E-Briefs, News and Notes: October 2025

The Section is delighted to host the Golden State Institute (“GSI”) in San Francisco and to celebrate Thomas Naif Dahdouh as our 2025 Antitrust Lawyer of the Year on October 23, 2025. For the first time, GSI will be held at the Hyatt Regency San Francisco at the Embarcadero.

As the Section’s signature event, GSI brings together thought leaders, top enforcement officials, and leading practitioners to discuss important topics in California and federal antitrust and consumer protection law, including:

• Keynote Speaker: The Honorable Patricia Guererro, Chief Justice of the California Supreme Court
• Recent Developments in Antitrust and Unfair Competition Law
• Merger Control Developments
• Market Power at the Market: The Kroger/Albertsons Merger Trial Up Close
• Cartwright Act Reform
• Antitrust in Higher Education
• Antitrust Ethics in Action 3.0
• JUDGES PANEL: Managing Complex Antitrust and Unfair Competition Litigation

We are also excited to be introducing this year’s recipients of the New Lawyers to Watch Award at the Celebration Event the evening before GSI on the evening of October 22, 2025, at the Waterfront Room of the Hyatt Regency.

Finally, we also look forward to thanking our volunteers who contributed last year to the success of the Antitrust and Consumer Protection Section at the Celebration Event. Our volunteers are the lifeblood of the Section. Please join us in bringing together all our volunteers and thanking them for contributing to or serving the Section. Their commitment makes a difference.

Register for GSI, the Antitrust Lawyer of the Year Dinner, and the Celebration Event today.

We look forward to seeing you at all of the 2025 GSI events!

Steve Vieux
Chairperson, GSI Committee

By Cheryl Johnson and James Rich

Summary. In a 226-page decision, Judge Mehta explains his selection of remedies to address earlier findings that Google secured monopolies in the search and search advertising markets through anticompetitive means. The judge enjoined Google from any express or de facto exclusionary practices or agreements as to its search or Gen AI products but allowed Google to continue paying for product placement and preloading of Google products onto third party hardware. Google was also required to offer search datasets and search and ad syndication services to qualified competitors, publicly disclose some text ad auctions changes, and submit to an independent Technical Committee for six years. Id at *3.

The remaining proposed remedies, including divestment of Chrome or Android, choice screens, self-preferencing bans, sharing granular data with advertisers, public education campaigns, reporting of all investments, or self-preferencing bans were rejected as poorly crafted, unfit or unfounded. Id. at *3.

Liability Phase Ruling. After an extended trial starting in 2023, Judge Mehta ruled that Google is a monopolist in the general search services and search advertising markets and that it maintained its monopoly for more than a decade using anticompetitive agreements with device makers, carriers and browser developers. Id. at *1, 5. These agreements were determined to be expressly or de facto exclusionary and the cause of significant anticompetitive effects including foreclosure of rivals’ opportunities to compete, reduced incentives to innovate in search, supracompetitive text ad prices and depression of rivals’ advertising revenue. Id. at *6, 38.

Remedies Phase. A three-week evidentiary trial held in 2025 explored appropriate remedies to revive competition in the dominated search markets. Id. at *2, 7. Though Google’s dominance had not changed since the liability trial, Judge Mehta found the “emergence of Gen AI [generative artificial intelligence] has changed the course of this case.” Id. at *2. While not established as competitors to general search engines in the liability phase, Gen AI products’ growing presence in search was a major focus of the remedies trial, together with concerns that Google’s dominance in search might carry over into the Gen AI space. Id. at *2. Acknowledging his broad discretion in imposing remedies, Judge Mehta however choose to proceed with “great humility” due to his self-professed lack of expertise in search engines, search text ads or the Gen AI technologies. Id. at *31. Moreover, unlike the typical case where the court resolves disputes based on historic facts, here, he noted, “the court is asked to gaze into a crystal ball and look to the future. Not exactly a judge’s forte.” Id. at *2.

Conclusions of Law re: Remedies. Remedies must seek to unfetter a market from anticompetitive conduct, deny defendant the fruits of its statutory violation, restore competitive conditions and ensure there remain no practices likely to result in monopolization in the future. Id. at *29. But caution as to remedies that substantially stifle innovation or impair consumer welfare, or that were unmindful of the courts and judges’ limitations is also advised. Id. at *31. Additionally, remedies must be narrowly calibrated by their causal connection to the evidence establishing liability. Id. at *31. For structural remedies, there must be a “significant causal connection” to the liability evidence, which is a standard short of but-for causation. Id. at *31, *35-36. Injunctive relief, on the other hand, required only the rather “edentulous” [toothless] “reasonably appears capable” causation standard. Id. at *36. In the liability phase, the court admitted that its factual findings were not made with an eye on the stricter, remedies’ causation standard.

Remedies Phase Findings. Thirty pages of the remedies order provided extensive background on the developments, players, and products in the “highly competitive” Gen AI market. Id. at *8-20. This market had “numerous new entrants” with firms with “access to a lot of capital” with “constant jockeying for a lead in quality among GenAI products and models.” Id. at *20. While Gen AI products had “some impact on general search use”, they were in a separate market and not a substitute for search engines. Id. at *21-22. Though Google’s AI models did not have “a distinct advantage over others,” Google’s use of AI Overviews in its search services was recognized as potentially strengthening Google’s search market position. Id. at *20-22.

Judge Mehta found Google’s unlawful exclusive distribution agreements and payments for default status foreclosed any potential competitors access to scale and data and reduced their incentive to invest in their own search services. Id. at *38. Thus, these agreements permitted Google to dominate the most efficient channel of search and corner some 90-95 percent of U.S.-based queries with the vast amount of associated user data. This in turn, allowed Google to “persistently widen the data moat” and ensure that “no competitor would try to lay siege to the castle.” Id. at *39-40. Google’s scale, the “cornerstone” of its success in the search market, was built by snaring the vast quantity of queries and user data and was then amplified by network effects and Google’s ability to increase text ads prices, tripling its 2014 ad revenue of $47 billion to $146 billion in 2021. Id. at *46.

Prohibitory Injunctive Relief. Google was enjoined from exclusionary conduct or agreements with its search products and services, Chrome, Play Store, Google Assistant or Gen AI technologies. Id. at *51. This allowed third parties to use non-Google products while licensing a single Google product and avoiding obligations to download or use other Google products. Id. Although Gen AI technology and products were not part of the relevant market, the court included them in the remedy, as Google had strengthened its search engine with Gen AI technology, and could not be permitted to leverage its search dominance into dominance in the Gen AI space. Id. at *48-51.

Chrome Divestiture: Simply enjoining exclusionary agreements would not revive competition and left Google with “too many advantages that are derived in part from a decade-long vice grip on default distribution, including its quality, data volume, and capacity to monetize search queries.” Id. at *51-52. Despite this reality, the court refused a divestiture of Chrome, labeling it “a poor fit,” and a “drastic” and “radical” remedy of last resort to be used only if less severe remedies were determined to be likely inadequate. Id. at *52, 55, 57. It was Google’s control of the Chrome default, not its ownership of Chrome that the court emphasized in its liability findings. Id. at *55. Since Chrome was not a standalone business, its divestiture would be “incredibly messy and highly risky”; given that over 80% of Chrome users were outside the U.S., the feasibility of a divestiture limited to U.S. based consumers was also unknown. Id. at *55-56. Nor was the court willing to grant a proposed contingent divestiture of Android if competition did not increase in five years, citing a lack of proof of the feasibility of such a sale or how it would increase competition. Id. at *57.

Payment Ban. Googles’ exclusive agreements and payments of more than $26 billion to secure default search status strongly incentivized users towards Google and made the search ecosystem “exceptionally resistant to change.” Id. at *58, 61. Nevertheless, Google was allowed to continue paying browser developers though it could not secure exclusivity for other Google products and was limited to one-year agreements. Id. at *53-54, 57. The government sought a total prohibition on Google’s search-related payments to distributors, particularly given their centrality to the construction of Google’s competition moat. However, Judge Mehta concluded that banning payments would “pose a substantial risk of harm” to OEMs, carriers, and browser developers who would likely have to keep Google search in the absence of any real effective search alternative. Id. at *58. Not only would this free Google from having to pay billions for its search traffic, but rivals would pay less for search traffic if Google could make no payments. As a result, there could be “significant downstream effects on multiple fronts, some possibly dire,” including the possible reduction of the ability of developers and Apple to innovate, which in turn could cause an increase in mobile phone prices. Id. at *59, 60. Additionally, the judge found allowing Google payments to be more palatable given the rapid and “astonishing” flow of money into Gen AI products that pose a threat to search dominance. Id. at *61. All these new realities weighed “in favor of ‘caution’ before disadvantaging Google in this highly competitive space.” Id. However, Judge Mehta was prepared to revisit the payment issue if competition was not substantially restored through the remedies ordered. Id. at *62

Data Sharing Remedies: Google was required to share various data sets to provide rivals and new entrants with the ingredients to improve their own search products. Id. at *63. This would deny Google the “massive scale advantage” from its anticompetitive conduct that was “the key reason why Google is effectively the only genuine choice as a default” general search engine. Id.at *62. Data sharing was essential to improve rivals ability to return high quality search results and thus to promote more competition in the search market. Id. at *63-64, 67. The court pruned the type and frequency of the data to be shared (id. at *67-74,78-80), priced it at Google’s marginal cost (id. at *71) and tasked the Technical Committee with oversight of data security and data cap issues among other things (id. at *78, 100).

Search and Search Text Ad Syndication Remedies. The court agreed with the government’s request that Google offer Qualified Competitors a ten-year license on search and search tech ad services. However, it narrowed the government’s proposals in multiple ways: (1) data to be produced was limited to ranked organic web search results from crawling the web (id. at *82); (2) market rates for these services could be charged as marginal cost pricing would create a free rider problem (id. at *83, 88-89); (3) syndication services were limited to five, not ten, years to encourage competitors to wean themselves from Google services earlier (id. at *83); and (4) only 40% of competitors’ queries could be syndicated from Google. Id.

Choice Screens. The Court declined to impose choice screens that would ask the consumer to choose among products and providers. Id. at *89-90. While promoting user choice to blunt the “power of defaults,” the court felt it inappropriate to compel a product redesign or to bar Google from installing its own search on its own products. Id. at *90. Moreover, until there was a competitive alternative to Google search, a choice screen “offers no genuine ‘choice’” to users, a conclusion borne out by the EU’s ineffectual mandating of choice screens back in 2020. Id. at *90-91.

Ad Transparency & Advertiser Control Remedies. Google’s ability to degrade information and options to its advertisers was another anticompetitive effect of its exclusionary conduct. However, while providing more information to advertisers and reinstating a 2014 advertiser opt out might prove “useful” to the advertisers and better inform their ad spending, there was no “persuasive evidence of a competitive benefit” from this. Id. at *92- 94. The Technical Committee was tasked with deciding when and what Google must disclose about changes in its search text ad auctions to curb Google’ highly opaque ad pricing practices. Id. at *95.

Other Remedies.

• A public education fund to promote consumer awareness of the Google litigation requested by the plaintiff states was denied as a remedy not tailored to fit the wrong. Id. at *96. Also, its putative price tag (nine-figures or up) was deemed “ill-defined and seemingly boundless.” Id.
• Despite concerns that Google might corner the market on website content just as it had done with search, the court declined to ban Google’s exclusive dealing with publishers of websites or to require Google to allow those publishers to optout of making their content available for training AI products. Id. at *96-97. This remedy fell outside the scope of Google’s contractual relationships with search distributors, and there was no factual basis to restrict Google’s content agreements or use of most-favored nations clauses with the website publishers. Id. at *97-98.
• A host of requested anti-retaliation and administrative remedies were rejected for failure to clearly define the prohibited conduct, being worldwide in scope and lacking evidence of any actual retaliation by Google. Id. at *99-100.

Technical Committee. A six-year independent Technical Committee to assist the Government’s enforcement of the final judgment was approved despite Google’s objection it had too much power, an objection largely mooted by the court’s narrowing of remedies. Id. at *100. The Committee was tasked with setting standards for the Qualified Competitors designation, establishing privacy and data security settings, overseeing search auction changes, setting caps and tapering rates on data disclosures and search syndications, among other things. Id. at *100-101. The court rejected a three-year enforcement period as inadequate since Google’s decade-long monopoly had endured with little meaningful entry and the EU’s efforts to instill greater competition for more than five years “have not moved the needle.” Id. at *105. It also rejected a ten-year term “in these fast-moving times, where GenAI technologies are breaking barriers seemingly at light speed.” Id.

Other. The proposal that Google report any proposed acquisitions, partnerships or mergers without regard to HSR thresholds was rebuffed as “not tailored” to Google’s liability which did not involve any anticompetitive acquisitions. Id. at *101-102. Similarly, the government’s request to ban self-preferencing by Google was denied. Id. at *103. Judge Mehta noted that product improvements were lawful and that he would not hobble Google’s competitiveness by prohibiting self-preferencing of its own Gen AI technologies, when that is precisely how the emerging – and highly competitive – GenAI marketplace operates.” Id. at *104. That being said, the court noted the risk of circumvention of the order by Google, given, for example, “Google’s aggressive efforts to avoid creating a paper trial for regulators and litigants.” Id. Because of this, the court was prepared to modify the decree if compliance became an issue. Id. Finally, fees to the plaintiffs were left to a separate motion. Id. at *106.

By Anjalee Behti

The Southern District of Florida granted The Hershey Company’s motion to dismiss a proposed class action alleging deceptive packaging for its seasonal Reese’s Peanut Butter Shapes, holding that the plaintiffs failed to allege a concrete injury sufficient for Article III standing. 2025 WL 2686987, at *4-7.

Plaintiffs Nathan Vidal and Eduardo Granados claimed they purchased Reese’s Peanut Butter Pumpkins and Reese’s White Pumpkins based on packaging that depicted “cool looking” carved pumpkin faces, but the actual products were blank. They alleged a single violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 501.201. Id. at *1-2, *4-5.

Hershey manufactures and markets a range of Reese’s Peanut Butter products, including the Reese’s Peanut Butter Pumpkins shown above. The products plaintiffs purchased, however, did not feature the carved mouth and eye designs displayed on the packaging and were instead entirely plain, as shown below.

Hershey argued that plaintiffs lacked standing because they suffered no injury-in-fact and received the benefit of their bargain — “delicious Reese’s candy.” Id. at *2, *6. It further contended that the packaging included “DECORATING SUGGESTION” disclaimers and that the claim failed under Rules 9(b) and 12(b)(6). Id. at *2-3, *4-6.

Judge Damian held that the plaintiffs’ allegations of “disappointment” did not amount to an economic injury. Id. at *6. The order emphasized that plaintiffs did not allege the candies were defective, inedible, or otherwise worthless, nor did they plead facts showing a diminution in value or price premium. Id. at *6-7. Relying on district precedent, the Court found the allegations “boil down to [plaintiffs’] subjective, personal expectations” and therefore failed to establish a concrete injury under Article III. Id. at *6 (citing Valiente v. Publix Super Markets, Inc., No. 22-22930, 2023 WL 3620538 (S.D. Fla. May 24, 2023), and Melancon v. Alpha Prime Supps LLC, No. 24-61135, 2025 WL 375903 (S.D. Fla. Jan. 13, 2025)).

Because the absence of standing deprived the Court of subject-matter jurisdiction, it declined to reach Hershey’s remaining Rule 12(b)(6) and Rule 9(b) arguments or the motion to strike class allegations. 2025 WL 2686987, at *7. The Court dismissed the complaint without prejudice for lack of jurisdiction. Id. at *7-8. Plaintiffs’ embedded request for leave to amend — made only in their response brief — was denied as procedurally improper, though the Court allowed them fifteen days to file a proper motion for leave under Rule 15. Id.

All other pending motions, including plaintiffs’ motion for class certification and the parties’ joint motion to stay, were denied as moot. Id. at *8. The clerk was directed to close the case. Id.

Next Steps

Under the order, plaintiffs must file a properly noticed motion for leave to amend within fifteen days of September 19, 2025, or bring any renewed pleading as a new action. Id. Absent such a filing, the case remains closed.

By Alex J. Tramontano

In a now-certified class action, defendant Tesla, Inc. (“Tesla”) is alleged to have made misleading statements about the full self-driving capability of its vehicles. Plaintiff purchasers allege that Tesla’s conduct violates California’s Unfair Competition Law (“UCL”), Consumer Legal Remedies Act (“CLRA”), and False Advertising Law (“FAL”), and further constitutes fraud, negligent misrepresentation, and negligence. The Court previously dismissed all warranty claims but permitted Plaintiff’s fraud-based, negligence-based, and related statutory claims to proceed.

The controversy largely stems from statements made at a press conference in October 19, 2016, with substantially similar statement also appeared in a Tesla newsletter disseminated in November 2016 (“All Tesla vehicles produced in our factory now have full self-driving hardware, enabling a rapidly expanding set of new Autopilot features to be introduced over time”).

The Court, Judge Rita F. Lin of the Northern District of California, issued an Order on August 18, 2025, certifying two Fed. R. Civ. P. 23(b)(3) classes: (1) California Arbitration Opt-Out Class for Tesla vehicle purchasers/lessees who paid separately for FSD packages from May 19, 2017 to July 31, 2024, in California or currently residing in California, who opted out of arbitration agreements; (2) California Pre-Arbitration Class: Tesla vehicle purchasers/lessees who paid separately for FSD packages from October 20, 2016 through May 19, 2017, in California or currently residing in California. The Court also certified a Rule 23(b)(2) Injunctive Class of members of both above classes who would consider purchasing FSD in the future but cannot rely on Tesla’s advertising.

Based on the pleadings and the class certification motion, Plaintiffs allege two primary misrepresentations occurred. A “Hardware Statement” that Tesla vehicles were already equipped with hardware necessary for full self-driving capability. And a “Cross-Country Statement” that a Tesla vehicle would be able to drive itself coast-to-coast within following year. The Court found sufficient class-wide exposure for the Hardware Statement was established through Tesla’s direct-to-consumer model, website prominence, and consistent messaging across channels. The Court found insufficient class-wide exposure for the Cross-Country statement, as it was limited to sporadic social media posts and press conferences without adequate reach evidence.

On the FRCP Rule 23 requirements for class certification, Judge Lin found numerosity satisfied by 3,595+ “Pre-Arbitration” class members and 212+ “Opt-Out” members.

Commonality and predominance of class issues was supported by (1) common proof available for Hardware Statement’s falsity, materiality, and class exposure; (2) expert testimony established common sensor limitations across hardware versions; and, (3) damages are calculable through a common methodology (difference between payment and value received).

Typicality and Adequacy were found for class representative as typical of class members despite a potential statute of limitations issue. Judge Lin found that “the primary question in the tolling inquiry here is the extent to which consumers reasonably relied on Tesla’s misrepresentations that the technology was software-limited or that full self-driving features would be coming. This question is subject to resolution on a classwide basis.” Superiority was also found, since individual litigation would be uneconomical given relatively low damages and high litigation costs.

The Court rejected Tesla’s argument that individualized statute of limitations inquiries defeat class certification. Tolling theories (delayed discovery rule and equitable estoppel) depend on objective inquiry into Tesla’s misrepresentations to the class, making them suitable for common resolution.

Finally, for certification purposes, the Court accepted plaintiff’s damages model under California restitution law: difference between amount paid and value received. Plaintiff argues Tesla delivered no value, supporting a full refund theory, though court noted this remains disputed.

The Court appointed Class Counsel as Cotchett, Pitre & McCarthy LLP; Casey Gerry Francavilla Blatt LLP; and Bottini & Bottini, Inc., who filed an amended complaint to conform to certified class definitions.

By Maria Ramirez

In June 2025, the Southern District of New York dismissed the consolidated multidistrict litigation in In re Concrete and Cement Additives Antitrust Litigation. Judge Lewis J. Liman granted defendants’ motion to dismiss in its entirety, concluding that plaintiffs had not plausibly alleged a conspiracy to fix prices in violation of Section 1 of the Sherman Act.

Background

The litigation arose from claims brought by two classes of plaintiffs. Direct purchasers, who alleged that they had bought concrete and cement additives (CCAs) directly from the defendants; and indirect purchasers who claimed to have purchase products containing those additives through intermediaries. The defendants comprised six corporate groups – Sika, Saint-Gobain, Cinven, BASF, RPM, and Mapei – that together controlled between eighty and ninety percent of the U.S. market for CCAs. According to plaintiffs, this high level of concentration, combined with repeated acquisitions and cross-ownership transactions among the groups, created conditions ripe for collusion.

Plaintiffs pursued remedies under Sections 1 and 3 of the Sherman Act, in addition to various state antitrust and consumer protection laws, as well as common law unjust enrichment. The complaints set out several strands of circumstantial evidence, which, together, according to plaintiffs, rise to a plausible inference of a cartel.

First, plaintiffs catalogued a series of price increases between 2017 and 2024, sometimes announced publicly and sometimes incorporated into supply contracts, which they argued were not justified by input costs or supply chain disruptions. With it, the direct purchaser plaintiffs performed a regression analysis suggesting that prices were on average fifteen percent higher than would be expected under competitive conditions, even after accounting for raw materials, freight costs, labor, and demand fluctuations.

Second, plaintiffs alleged that defendants shared membership in multiple trade associations, particularly the National Ready-Mix Concrete Association, where benchmarking surveys and other data exchanges allegedly facilitated collusion.

Third, plaintiffs emphasized ongoing investigations by regulators in the United States, the European Union, the United Kingdom, and Turkey. These probes included dawn raids, a U.S. grand jury investigation, and the public confirmation by several defendants that they were subjects of inquiry.

However, Judge Liman held that these facts were not enough to find a plausible anticompetitive conduct.

Court’s analysis

The court concluded that plaintiffs had no direct evidence of an agreement and instead relied on circumstantial evidence allegations of parallel conduct and so-called “plus factors,” failing to raise their allegations to the level required by Twombly and Iqbal. Here, the alleged price increases were too inconsistent to establish parallelism. They varied widely across geography, product lines, timing, and size, which undermined any inference that defendants were acting in concert rather than responding independently to market conditions.

Judge Liman also contrasted the plaintiffs’ allegations with those upheld in In re RealPage, Inc, Rental Software Antitrust Litigation (No. II), 709 F. Supp. 3d 478, 509 (M.D. Tenn. 2023), where a conspiracy claim survived because plaintiffs plausibly alleged that competing landlords shared real-time pricing information through a common algorithmic platform, enabling coordinated price increase. In RealPage, the court found that defendants’ use of centralized tool provided a concrete mechanism for collusion. By comparison, the CCA complaints lacked any factual allegations of communications, agreement, or use of a facilitating device that could have aligned defendants’ pricing. Without such a mechanism, the court explained, mere parallel conduct combined with market concentration was insufficient to infer collusion.

The court then considered the asserted plus factors and recalled that market concentration, though relevant, is not by itself evidence of collusion, and the mere fact that an industry is “susceptible to collusion” does not establish that collusion occurred. Similarly, participation in trade associations is common and often procompetitive, and without concrete allegations of information exchanges or explicit agreement, it cannot sustain a claim. Citing Todd v. Exxon Corp., 275 F.3d 191, 198(2d Cir. 2001), which recognizes that plus factors such as facilitating practices can transform parallel conduct into plausible collusion, the court emphasized that, here, plaintiffs failed to identify such practices.

The consolidation of the CCA industry through acquisitions was also insufficient to the court, as such transactions often have legitimate business justifications. Finally, the court also rejected the plaintiffs’ reliance on their regression analysis. Judge Liman held that such modeling was insufficient, citing the Second Circuit’s decision in City of Pontiac & Fire Ret. Sys. V. BNP Paribas Sec. Corp., 92 F.4th 381 (2d Cir. 2024),which explained that statistical models relying on averages over long spans of time do not plausibly allege parallel conduct. Here, plaintiffs failed to disclose the data, methodology, or variable weighting underlying their model, leaving the court with only a bare assertion that prices were supra-competitive.

The court found that the complaints also faltered in failing to connect each defendant to the alleged conspiracy. Accordingly, the court stated that plaintiffs had not adequately tied foreign parent companies or private equity investors such as Cinven to the alleged misconduct, nor had they shown that control over subsidiaries translated into participation in an unlawful agreement. As a result, the allegations did not make it plausible that all six corporate groups had conspired together to restrain trade.

Conclusion

Because the federal Sherman Act claims could not survive dismissal, the state law antitrust, consumer protection, and unjust enrichment claims brought by the indirect purchaser plaintiffs also failed. The court thus granted dismissal.

By David Lerch

Coinbase moved to compel arbitration in a class action alleging that Coinbase charged customers hidden fees in cryptocurrency transactions. The Plaintiffs argued that Coinbase’s arbitration agreement contained a class waiver and so could not be enforced, but the District Court concluded that Plaintiff’s reliance on the 2005 California Supreme Court decision Discover Bank v. Superior Court was preempted by the Federal Arbitration Act, despite a batching agreement providing for the resolution of the batched claims in one arbitration.

Coinbase’s User Agreement

In 2022, Coinbase updated its user agreement and emailed its users to notify them. Coinbase hyperlinked the 2022 terms and advised its users that they would be asked to accept the terms upon logging into their account. The landing page also hyperlinked an article explaining that users could submit a request so Coinbase Support could help them close their account and move their funds off the platform if they did not want to accept the changes. The 2022 User Agreement included an arbitration agreement providing for disputes to be resolved by binding arbitration, which included a class waiver, and also included a batching provision governing how multiple claims filed by the same law firms would be arbitrated (Order at 2). In particular, the agreement provided that in the event that there were 100 or more individual requests of a similar nature filed against Coinbase, AAA would: (1) administer the arbitration demands in batches of 100; (2) appoint one arbitrator for each batch; and (3) provide for the resolution of each batch as a single consolidated arbitration (Order at 3).

Plaintiffs sued Coinbase, alleging that it charged consumers hidden fees in cryptocurrency transactions on the website and thus violated California and New York consumer protection laws. Coinbase then moved to compel arbitration based on the arbitration agreement. Plaintiffs opposed the motion to compel on the grounds that the class waiver was unconscionable (Order at 3).

The Federal Arbitration Act

The Court noted that contracts relating to a commercial transaction are subject to the Federal Arbitration Act. Order at 3, citing Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The Court explained that the FAA provides that an arbitration agreement “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity.” 9 U.S.C. § 2 (Order at 4). The grounds for invalidating an arbitration agreement include “generally applicable contract defenses, such as fraud, duress, or unconscionability.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). A court must compel arbitration if it finds that (1) a valid arbitration agreement exists and (2) the agreement applies to the dispute at issue (Order at 4). The Court noted that Plaintiffs raised three reasons why Coinbase’s class waiver was unconscionable: (1) that it violates the Discover Bank rule regarding class waivers; (2) that the high cost of arbitration would otherwise bar them from effectively vindicating their claims and (3) that it does not pass muster under traditional unconscionability analysis (Order at 4-5).

The Discover Bank Rule

In 2005 the California Supreme Court decided in Discover Bank v. Superior Court, 36 Cal. 4th 148, 162–63 (2005) that a class waiver is unconscionable when it “is found in a consumer contract of adhesion in a setting in which disputes between the contracting parties predictably involve small amounts of damages and when it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money.” California courts applied this rule, known as the Discover Bank rule, to invalidate as unconscionable arbitration agreements with class waiver provisions. Gatton v. T-Mobile USA, Inc., 152 Cal. App. 4th 571, 586–88 (2007) (Order at 5). In 2011 the Supreme Court held that, as applied to arbitration agreements, the Discover Bank rule was preempted by the FAA. Concepcion, 563 U.S. at 352. The Discover Bank rule also interfered with the FAA’s purpose of ensuring that private arbitration agreements are enforced according to their terms. Id. at 344 (Order at 5).

The Court noted that Ninth Circuit recently addressed the continued viability of the Discover Bank rule in Heckman v. Live Nation Entertainment, Inc. 120 F.4th, 670 (9th Cir. 2024). The plaintiffs in Live Nation had signed an arbitration agreement providing for: (1) authority for one party to replace the agreed-upon arbitrator at its sole discretion; (2) three bellwether trials to be litigated individually and confidentially with any outcome to become precedent on all common issues in all batched cases; (3) limited discovery; and (4) a rule that parties could appeal only awards, not denials, of injunctive relief (Order at 6). The Ninth Circuit held that the FAA did not protect Ticketmaster and New Era’s mass arbitration model because Congress contemplated bilateral arbitration—not class-wide arbitration—when it passed the FAA, and so the FAA does not preempt California’s Discover Bank rule as applied to mass arbitration. Id. at 690.

Plaintiffs argued that Heckman governs here, and so the Discover Bank rule applies and renders Coinbase’s class waiver unconscionable because Coinbase’s batching provisions deviate from the bilateral arbitration that Congress envisioned when it passed the FAA (Order at 6). Coinbase asserted that the inquiry focuses on whether the proceeding has a representative nature, that is, whether the arbitration procedures would bind absent plaintiffs to decisions in bellwether trials, like in a class action or MDL (Order at 7). They therefore contended that any non-representative arbitration, individual or consolidated, is bilateral for purposes of the FAA.

The Court concluded that Heckman, when read alongside the Supreme Court’s arbitration jurisprudence, just holds that the FAA does not protect representative arbitration (Order at 7). The Court noted that following Concepcion the Supreme Court has expressly rejected the argument that “a proceeding is ‘bilateral’ if but only if it involves two and parties and the arbitration is conducted by the named parties only.’” Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 656 (2022). In Jones v. Starz Entertainment, LLC,129 F.4th 1176, 1182 (9th Cir. 2025), the Ninth Circuit explained that consolidation is not the same as class or representative arbitration and that in a class or representative arbitration, an individual brings claims on behalf of others, whereas a claimant in a consolidated arbitration brings the claim in her individual capacity. The Court concluded that Coinbase’s arbitration agreement provides for consolidated, not class-wide, arbitration and there are no bellwether or representative proceedings that bind absent parties. Each batched arbitration operates as a single consolidated arbitration with one set of filing and administrative fees due per side per batch, one procedural calendar, one hearing and one final award. The arbitration provision clarifies that in no way shall it be interpreted as authorizing a class, collective, and/or mass arbitration or action of any kind. The Court also concluded that the problematic attributes of the mass arbitration model from Heckman were not present here because Coinbase’s arbitration agreement and the AAA rules do not involve bellwether trials, impose strict file or page limits for discovery or briefs, or restrict appeals only to those brought by one side (Order at 9).

Effective Vindication

The Court also rejected Plaintiffs’ argument that the class action waiver effectively deprives Plaintiffs of any meaningful right to pursue their statutory claims in arbitration (Order at 10). The Supreme Court has explained that litigating the issue of effective vindication would create a hurdle that would undoubtedly destroy the prospect of speedy resolution that arbitration in general and bilateral arbitration in particular was meant to secure. Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 239 (2013). In addition, the Court noted that Plaintiffs did not sufficiently demonstrate that arbitration would be prohibitively expensive, noting that Plaintiffs’ argument that the $225 filing fee makes it economically unappealing to pursue their claims was unsupported because for at least one of Plaintiffs’ claims they request the greater of actual damages or $50, not considering statutory penalties of up to $10,000 (Order at 9).

Traditional Unconscionability Analysis

Plaintiffs argued that even if the class waiver is not subject to the Discover Bank rule, the Court can still invalidate it using traditional unconscionability analysis (Order at 10). To demonstrate that a contractual provision is unconscionable, Plaintiffs need to show both procedural and substantive unconscionability. Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1260 (9th Cir. 2017). These two factors work on a sliding scale: “[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” Id.

The Court noted as to procedural unconscionability that there was no dispute that Coinbase’s 2022 User Agreement is a contract of adhesion, but an adhesive contract without more is only minimally procedurally unconscionable. California courts consider whether the parties were relatively similar in bargaining power and sophistication, whether the complaining party had access to reasonable market alternatives, and whether the provision is buried in a lengthy agreement. Aggarwal v. Coinbase, Inc., 685 F. Supp. 3d 867, 880– 81 (N.D. Cal. 2023). The Court noted that other decisions in the Northern District of California had repeatedly rejected arguments that Coinbase’s 2022 User Agreement is procedurally unconscionable on its face (Order at 10). The Court noted that the arbitration agreement, including the class waiver, is clearly presented in bolded, all-caps font, and the provisions are clearly labeled (Order at 11). Plaintiffs argued that the class waiver is procedurally unconscionable because it: (1) gives Coinbase the unilateral right to make material changes to the Arbitration Clause, (2) has conflicting terms about whether changes apply retroactively, and (3) considers continued use of the Coinbase site as an acceptance of the new terms. However, the Court concluded that Plaintiffs do not allege that the unilateral modification or retroactivity clauses were actually enforced or used to specifically alter the class waiver, and Coinbase users were not beholden to the website or forced to accept its terms, and users were given the option to close their account and transfer their cryptocurrency elsewhere if they objected to the 2022 User Agreement. (Order at 11).

The Court noted that substantive unconscionability addresses whether the terms of the agreement are so overly harsh or one-sided that they shock the conscience and the terms must be unreasonably favorable to the more powerful party. Plaintiffs argued that the class waiver was unconscionable because the cost of initiating an arbitration is greater than the value of each Plaintiff’s claim, but the Court noted that Plaintiffs do not identify any specific provisions of the arbitration agreement that are unnecessary and unreasonable, and Plaintiffs did not make a concrete showing of their inability to pay (Order at 12). Plaintiffs also argued that the class waiver is unconscionable because it unlawfully strips consumers of their statutory right to seek public injunctive relief under California’s consumer protection statute, but the Court noted that Plaintiffs disavow any intent to request public injunctive relief (Order at 13). Third, Plaintiffs argued that the arbitration agreement grants attorney fees to any party who successfully compels arbitration in a judicial setting, but the fee-shifting provision is not part of the class waiver, meaning that its viability must be decided by an arbitrator. Finally, the Court noted that Plaintiffs argue that the Arbitration Clause unlawfully prohibits Plaintiffs from challenging the validity of the Limitation of Liability provision, but this argument also does not relate to the class waiver.

The Justice Department’s Antitrust Division and the United States Department of Agriculture (USDA) announced a Memorandum of Understanding (MOU) formalizing a partnership to protect competition in key agricultural markets such as feed, fertilizer, fuel, seed, equipment, and other essential goods. This partnership strengthens longstanding coordination between the agencies with a particular focus on ensuring coordination with respect to ensuring farmers and ranchers have competitive access to agricultural inputs.

“Antitrust enforcement ensures free market competition for agricultural inputs, lowering costs for farmers and prices for consumers,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “America’s farmers deserve nothing less than the best the Antitrust Division and USDA can do to promote competitive markets that free them to feed America.”

The MOU signed on Sept. 26 by both agencies underscores their shared commitment to ensuring effective antitrust enforcement that promotes free market competition, lowering inputs costs and benefiting farmers, ranchers, and consumers. It creates channels for regular consultation and communication between the agencies to ensure effective coordination, where appropriate, to benefit efforts to promote competition. And it commits both agencies to designate personnel to facilitate communications between and among attorneys, economists, and technical experts. 

Today, the Federal Trade Commission sued Zillow and Redfin over an unlawful agreement that eliminates Redfin as a competitor in the market for placing advertising of rental housing on internet listing services (ILSs)—the websites that millions of Americans use to find their next rental home.

Zillow Group, Inc., and Zillow, Inc., (Zillow) and Redfin Corporation operate two of the nation’s largest rental ILS networks by traffic and revenue, including sites such as Zillow Rentals, Rent.com, and ApartmentGuide.com. The complaint alleges that in February 2025, Zillow and Redfin entered into an illegal agreement to dismantle Redfin as a competitor in the ILS advertising market for multifamily rental properties.

In exchange for a $100 million payment and other compensation from Zillow, the complaint alleges, Redfin agreed:

• To end its contracts with advertising customers and help Zillow take over that business,
• To stop competing in the advertising market for multifamily properties for up to nine years, and
• To serve merely as an exclusive syndicator of Zillow listings, making Redfin sites effectively a copy of the listings that appear on Zillow’s sites.

Zillow and Redfin framed their agreement as a “partnership,” but in reality the arrangement is an end run around competition that insulates Zillow from competing head-to-head on the merits with Redfin, the complaint states. In connection with the agreement, Redfin fired hundreds of employees, then helped Zillow to hire its pick of those terminated workers.

“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “Zillow paid millions of dollars to eliminate Redfin as an independent competitor in an already concentrated advertising market—one that’s critical for renters, property managers, and the health of the overall U.S. housing market. The FTC will do our part to ensure that Americans who are looking for safe, affordable rentals receive all the benefits of robust competition between internet listing services like Zillow and Redfin.”

The FTC alleges that this agreement destroys competition for multifamily rental properties advertising on ILSs, harming both property managers seeking to advertise properties for rent and renters searching for a home. The agreement also constitutes an unlawful acquisition in violation of Section 7 of the Clayton Act, the complaint alleges.

The FTC alleges that the unlawful agreement will:

• Likely lead to higher prices and worse terms for multifamily unit advertising; and
• Reduce incentives for Zillow and Redfin to compete for renters, including through investment in attracting visitors and innovation to improve user experience when searching on an ILS for a rental property.

The complaint seeks to stop Zillow and Redfin from continuing their unlawful agreement and contemplates a potential divestiture of assets or the reconstruction of businesses to restore competition.

Throughout this investigation, the FTC worked in close collaboration with the offices of several state attorneys general. The Commission looks forward to ongoing cooperation with the states in this matter.

The Commission vote to authorize staff to file a complaint in the U.S. District Court for the Eastern District of Virginia was 3-0. 

The Federal Trade Commission is taking action against the operator of the Sendit anonymous messaging app for unlawfully collecting personal data from children, misleading users by sending messages from fake “people,” and tricking consumers into purchasing paid subscriptions by falsely promising to reveal the senders of anonymous messages.

A complaint, filed by the Department of Justice upon notification and referral from the FTC, alleged that Sendit’s operator, Los Angeles-based Iconic Hearts Holdings, Inc., and its CEO, Hunter Rice, violated the Children’s Online Privacy Protection Rule (COPPA Rule). The Rule requires operators of websites, apps and other online services that have knowledge they are collecting personal information from children under 13 to notify parents about what personal information the sites or apps collect and obtain verifiable parental consent before collecting such information. The complaint also alleged that Iconic Hearts made misrepresentations to users to push them to purchase premium subscriptions, unfairly used fake messages to trick child and teen users into purchasing premium subscriptions and failed to clearly disclose the terms of its subscription plans.

“Sendit’s operator and CEO were well aware that many of its users were under the age of 13 and still failed to comply with COPPA,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “At the same time, they manipulated many users, including children, into signing up for their weekly subscription service by sending fake messages and promising to reveal the identity of message senders but failing to deliver.”

The complaint alleged that Iconic Hearts knew that numerous Sendit users were under the age of 13 but failed to comply with the COPPA Rule. For example, in 2022, more than 116,000 users reported their age as under 13 while using Sendit, according to the complaint. Iconic Hearts also received complaints from parents who indicated that their children were under 13. Even though it was aware that many users were under 13, Iconic Hearts failed to notify parents that it collected personal information from children, including their phone numbers, birthdates, photos and usernames for Snapchat, Instagram, TikTok and other accounts, and did not obtain parents’ verifiable consent to such data collection.

The complaint also alleged that Iconic Hearts and Rice deceived Sendit’s users, many of whom were children and teens, into purchasing its premium “Diamond Membership” using methods such as:

• Misrepresenting that when users received anonymized Sendit messages, those messages came from users’ friends and social media contacts—when, in fact, many messages were fake and generated by Iconic Hearts;
• Sending fake messages that were often provocative and sexual in nature—such as “have you done drugs” or “would you ever get with me?”—and then encouraging users to buy its Diamond Membership to reveal who sent the message;
• Misrepresenting that users would find out the identity of message senders if they purchased a Diamond Membership—when, in reality, users received either false information (if the message was fake) or generic information like location or phone type (if the message was from a real person); and
• Failing to clearly disclose to Diamond Membership purchasers that they would automatically be billed as much as $9.99 every week, rather than paying a one-time fee to see who sent a particular message.

In addition to the COPPA Rule, Iconic Hearts and Rice allegedly violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which prohibits certain unfair or deceptive internet sales practices with a negative option feature.

The Commission vote to refer the complaint to the Department of Justice for filing was 3-0. The Department of Justice filed the complaint upon referral from the Commission in the U.S. District Courtfor the Central District of California.

Following a public comment period, the Federal Trade Commission has approved a final order to settle Federal Trade Commission charges that Omnicom Group Inc.’s $13.5 billion acquisition of The Interpublic Group of Companies, Inc. (IPG) would violate the antitrust laws. The order eliminates Omnicom’s ability to deny advertising dollars to media publishers based on their political or ideological viewpoint, except at the express and individualized direction of Omnicom’s advertiser customers.

As announced in June 2025, the complaint alleged that advertising agencies have coordinated—including through industry associations—on decisions not to advertise on certain websites and applications. Coordination among advertising firms may reduce ad revenues for particular media publishers, forcing those publishers to reduce the amount of content they can offer to their own consumers and their investment in their sites.

In response to comments received during the designated public comment period, the Commission modified the proposed order. The final order further clarifies the order’s scope and imposes a compliance monitor.

The commission vote approving the final order was 2-0-1, with Commissioner Mark R. Meador recused.

The Federal Trade Commission has secured a historic order with Amazon.com, Inc., as well as Senior Vice President Neil Lindsay and Vice President Jamil Ghani, settling allegations that Amazon enrolled millions of consumers in Prime subscriptions without their consent, and knowingly made it difficult for consumers to cancel. Amazon will be required to pay a $1 billion civil penalty, provide $1.5 billion in refunds back to consumers harmed by their deceptive Prime enrollment practices, and cease unlawful enrollment and cancellation practices for Prime.

“Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” said FTC Chairman Andrew N. Ferguson. “The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again. The Trump-Vance FTC is committed to fighting back when companies try to cheat ordinary Americans out of their hard-earned pay.”

The FTC has charged Amazon and several Amazon executives with knowingly misleading millions of consumers into enrolling in Prime, violating the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). The FTC alleged Amazon created confusing and deceptive user interfaces to lead consumers to enroll in Prime without their knowledge. Compounding these deceptive enrollment practices, Amazon also created a complex and difficult process for consumers seeking to cancel their Prime subscription, with the goal of preventing consumers from cancelling Prime. Amazon documents discovered in the lead up to trial showed that Amazon executives and employees knowingly discussed these unlawful enrollment and cancellation issues, with comments like “subscription driving is a bit of a shady world” and leading consumers to unwanted subscriptions is “an unspoken cancer.” 

The historic monetary judgment contained in the settlement is only the third ROSCA case in which the FTC has obtained a civil penalty. It includes:

• a $1 billion civil penalty, which is the largest ever in a case involving an FTC rule violation;
• $1.5 billion in consumer redress, providing full relief for the estimated 35 million consumers impacted by unwanted Prime enrollment or deferred cancellation. This is the second-highest restitution award ever obtained by FTC action.

Additionally, the settlement requires Amazon to stop their unlawful practices and make meaningful changes to the Prime enrollment and cancellation flows by:

• including a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”
• including clear and conspicuous disclosures about all material terms of Prime during the Prime enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.
• creating an easy way for consumers to cancel Prime, using the same method that consumers used to sign up. The process cannot be difficult, costly, or time-consuming and must be available using the same method that consumers used to sign up; and
• paying for an independent, third-party supervisor to monitor Amazon’s compliance with the consumer redress distribution process.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed orderin the U.S. District Court for the Western District of Washington.

OAKLAND — California Attorney General Rob Bonta joined a coalition of 13 attorneys general in seeking to intervene in the $14 billion Hewitt Packard Enterprises (HPE)/Juniper Networks merger while the merits of the settlement are evaluated by a judge. Before their merger, HPE and Juniper were rival networking equipment manufacturers. Last month, Attorney General Bonta opposed the U.S. Justice Department’s (U.S. DOJ) abrupt settlement of this merger amid allegations of backroom dealings and asked the judge overseeing the case to hold a hearing to determine if the merger is in the public interest. After reaching the settlement with U.S. DOJ, HPE and Juniper started the integration process — and in the filing today with the U.S. District Court for the Northern District of California, Attorney General Bonta asks to be allowed to participate directly in the investigative proceedings, which will allow California and other states to take further action to stop that merger integration process while the court evaluates the merits of the settlement.

“Allegations that the Trump Administration approved a $14 billion merger because of backroom deals with their buddy lobbyists are extremely alarming. Regulators from across the political spectrum have argued that the Trump Administration’s approval of the HPE/Juniper merger is inadequate and potentially the result of backroom deals. As policymakers and leaders, we must wield the power of our offices for the good of the people — not to line the pockets of friends or prosecute people we do not agree with,” said Attorney General Bonta. “Today, we take action and ask the court to allow California and other states to participate in the court’s investigation of the HPE/Juniper merger settlement as it determines if the approval is in the best interest of the American people. My office is fully prepared to engage in the investigation — it is our duty to ensure the Trump Administration is using their power lawfully.” 

Under the law, U.S. DOJ must seek approval of all antitrust settlements from the courts, and the courts must make independent judgments that a settlement is in the public interest. The attorneys general argue that publicly available information about the process that led to the HPE/Juniper settlement suggests that U.S. DOJ has failed to meet that standard in this case.

The attorneys general argue that the multistate coalition should be allowed to intervene in the matter and protect their citizens from violations of the antitrust laws, including seeking records related to the U.S. DOJ’s settlement and the process that led to it, holding hearings in open court, and obtaining a pause in integration of the merging parties pending the outcome of those proceedings. Without the states’ intervention, the only participants in the investigation into the settlement will be those who support the settlement, and the court would hear a one-sided argument. 

The Tunney Act is a post-Watergate scandal law enacted by Congress in 1974 to ensure that antitrust settlements reached by the U.S. DOJ are based on the merits rather than undue influence by powerful corporations and their well-connected lobbyists. Because states have a right to enforce federal and state antitrust law, including the Clayton Act, California has a right to participate in the Tunney Act process.

OAKLAND — California Attorney General Rob Bonta and Assemblymember Rebecca Bauer-Kahan (D-Orinda) today issued the following statements in response to Governor Gavin Newsom signing into law Assembly Bill 56 (AB 56), legislation that aims to protect children and teens from risks posed by social media.

“People across the nation — including myself — have become increasingly concerned with Big Tech’s failure to protect children who interact with its products. Today, California makes clear that we will not sit and wait for companies to decide to prioritize children’s well-being over their profits,” said Attorney General Rob Bonta. “By adding warning labels to social media platforms, AB 56 gives California a new tool to protect our children. I thank Assemblymember Rebecca Bauer-Kahan for introducing this legislation and look forward to continuing the vital work of ensuring social media platform use does not harm our kids.” 

“While I’m grateful Governor Newsom signed AB 56, our work isn’t finished. California’s children deserve both transparency about social media’s harms and accountability when platforms cause damage,” said Assemblymember Rebecca Bauer-Kahan. “I’ll continue working with Attorney General Bonta and my colleagues to ensure comprehensive protections become law. Our children’s mental health crisis demands nothing less.”

AB 56 requires social media companies to periodically display a warning label on their platforms when used by children and teens. The warning label advises that social media is associated with significant mental health harms and has not been proven safe for young users. It must be clearly displayed upon the user’s initial access of the platform in a given day, again after the user has reached three hours of cumulative active use that day, and thereafter at least once per hour of active use.

Last year, former U.S. Surgeon General Vivek Murthy called on Congress to require a surgeon general’s warning on social media platforms. Attorney General Bonta, joined by a bipartisan coalition of 42 attorneys general, supported this proposal and argued that mandating a surgeon general’s warning on algorithm-driven social media platforms could help address the growing youth mental health crisis and protect future generations of Americans. 

A growing body of research links young people’s use of social media platforms to a variety of serious harms, including depression, anxiety, and suicidal ideation. Adolescents who spend more than three hours per day on social media face double the risk of experiencing poor mental health outcomes. Social media companies are aware of this, yet do not share this information with consumers. California’s own ongoing lawsuits against Meta and TikTok claim that the social media giants intentionally design their platforms to addict young people to their mental and physical detriment for the sake of profits.

SACRAMENTO — California Attorney General Rob Bonta and Senator Melissa Hurtado (D-Bakersfield) today issued the following statements in response to Governor Gavin Newsom signing into law Senate Bill 763 (SB 763), legislation seeking to more effectively deter corporations from restraining trade, fixing prices, and reducing competition — actions that can raise prices and harm workers, businesses, and consumers.

“This week, California took action and increased penalties for wealthy corporations looking to illegally profit at the expense of workers, consumers, and honest businesses,” said Attorney General Rob Bonta. “As the fourth largest economy in the world, and home to some of the wealthiest corporations, California knows that a fair and competitive marketplace should work to benefit everyone, not just a select few. I thank Senator Hurtado for authoring this law to help ensure we have the appropriate tools to keep and protect California’s vibrant economy — for everyone.”

“There was a time when I, and too many people I love, felt abused by a system rigged against us. It’s not easy to forget what it felt like to watch my best friend struggle to buy baby formula. I feel a similar pain today as countless others do because the system is increasingly stacked against too many people. Senate Bill 763 will hold those responsible for that suffering accountable. And it’s about damn time,” said Senator Melissa Hurtado. “I’m deeply grateful to Attorney General Bonta and his incredible team for standing with us in this fight because this is how we start building an economy where no one is left behind.”

SB 763 will increase criminal penalties and add civil penalties under California’s Cartwright Act, which prohibits agreements between corporations that restrain trade, limit production, and fix prices or otherwise prevent competition. The existing penalties for violations of the Cartwright Act have not been updated in decades and are insufficient to deter anticompetitive activity in the current market.

Specifically, SB 763 will: 

• Increase the criminal fines for corporate violators from $1 million to $6 million per violation.
• Increase the criminal fines for individuals from $250,000 to $1 million per violation.
• Add civil penalties of up to $1 million per violation that courts can impose based on factors such as the nature, seriousness, and persistence of the misconduct.