Antitrust and Unfair Competition Law

Competition: SPRING 2023, Vol 33, No. 1


By Kendall MacVey and Wendy Y. Wang1

Unlike Section 2 of the Sherman Act, the Cartwright Act, California’s principal antitrust statute, does not explicitly prohibit monopolization or attempted monopolization.2 Rather, with the exception of one provision prohibiting a condition on purchasers not to use a competitor’s goods or services, the Cartwright Act is silent on monopolization.3

Enacted in 1907, the Cartwright Act made "trusts" unlawful, which are defined as "a combination of capital, skill or acts by two or more persons for" specific purposes.4 California courts at various times have issued decisions that left open whether the Cartwright Act prohibits monopolization.

In 1978, for example, the First Appellate District Court of Appeal in Lowell v. Mother’s Cake & Cookie Co. (1978) 79 Cal.App.3d 13, 23 held that the Cartwright Act prohibits monopolization as the Act "prohibits the combination of resources of two or more independent interests for the purpose of restraining commerce and preventing market competition." But in 1988, the California Supreme Court appeared to disagree, examining the legislative history of the Cartwright Act and concluding that the Legislature did not intend the term "combination" to include mergers.5 Subsequent courts have interpreted that holding to mean that the Cartwright Act does not apply to single-firm monopolization.6 Then in 2015, the California Supreme Court confirmed this interpretation:

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