Competition Coast-to-Coast: State Antitrust Developments on Single-Firm Conduct, Algorithmic Pricing, and More
October 5, 2026
A pair of recent developments in California and New York is likely to have lasting consequences for companies navigating the ever-expanding landscape of state antitrust enforcement. In California, Governor Gavin Newsom signed the COMPETE Act (Assembly Bill 1776), expanding the scope of the Golden State’s antitrust law beyond concerted conduct—the usual ambit of state antitrust statutes—to prohibit single-firm monopolization.1 In New York, Judge Valerie Caproni preliminarily enjoined the NY Attorney General (“NY AG”) from enforcing a key provision of N.Y. Gen. Bus. Law § 340-B (the “NY Rental Law”)—the state’s new law targeting algorithmic pricing recommendation software for apartment rentals.2
Key Takeaways:
- California's antitrust regime has expanded: The COMPETE Act reaches single-firm monopolization for the first time, and uses an undefined "substantial market power" standard that may depart from federal law.
- Public enforcement only, for now: Lawmakers removed the private right of action, so only the Attorney General and district attorneys can bring single-firm conduct claims.
- Pricing algorithms may be protected speech: A federal court preliminarily blocked New York's broad ban on rent-setting software, finding that pricing recommendations based on public data may be constitutionally-protected commercial speech.
The California COMPETE Act
The COMPETE Act both extends California’s Cartwright Act to single-firm monopolization and monopsonization claims for the first time and directs courts to “be mindful that California favors ‘maximizing’ effective deterrence of antitrust violations.” As detailed in our recent alert, many of the COMPETE Act’s most significant provisions were removed before the California Legislature finally approved it. Most notably, the Legislature eliminated the private right of action, limiting enforcement to the Attorney General and district attorneys. The final version also removed several provisions stating that the purpose of the Cartwright Act is the promotion of free and fair competition; endorsing the FTC and DOJ’s 2023 Merger Guidelines; and requiring procompetitive justifications to be evaluated in the same relevant market as conduct alleged to be unlawful.3
Despite these modifications to narrow the Act’s scope and promote predictable enforcement, the Act introduces some uncertainty because it departs from federal antitrust law in key respects. Most significantly, the law requires the government to prove that the defendant possesses “substantial market power”—a standard that may be interpreted to differ from the “monopoly power” requirement under federal law. Because the statute does not define “substantial market power,” California courts will shape its meaning over time. Recognizing this ambiguity, Governor Newsom issued an accompanying statement warning that “the bill’s reference to ‘substantial market power’ should be understood as a necessary—but not sufficient—condition to prove unlawful conduct” and stating his expectation that “the Attorney General, district attorneys, and judges will interpret and apply [the Act] in ways that penalize clear wrongdoing without creating needless uncertainty that risks harming legitimate businesses.”4
New York: RealPage Secures Preliminary Injunction on Rental Software Ban
As discussed in our prior update, the NY Rental Law was enacted on October 16, 2025, and contains two key provisions. First, Section 2 prohibits facilitating an agreement not to compete between residential rental property owners or managers, including through software that performs a “coordinating function.”5 Section 3 goes considerably further, broadly prohibiting landlords from setting rents based on any recommendation from software that performs a “coordinating function,” without consideration for specific factors that other state legislatures and courts have deemed significant—most notably, whether the software relies on public or non-public data sources.6
RealPage, a property management software company, brought suit in November 2025, challenging the NY Rental Law as an unconstitutional restraint on protected speech under the First Amendment. On September 29, 2026, the district court preliminarily enjoined the NY AG from enforcing Section 3 based on a finding that RealPage would be “marginally[] likely to succeed on the merits” of its claim.7 The decision made several other key rulings:
- Algorithmic pricing recommendations may be protected speech. The court rejected the NY AG’s framing of the NY Rental Law as a regulation of conduct, finding that RealPage’s pricing recommendations constitute commercial speech subject to First Amendment protection.8
- Section 2 remains enforceable. The court found that Section 2 of the NY Rental Law merely clarifies that price-fixing remains illegal when accomplished through the use of “coordinating software,” and does not expand the universe of prohibited conduct.9
- Section 3 enjoined. Turning to Section 3, the court described the “closest and most pivotal question” as whether the NY Rental Law’s broad prohibition could be considered a “reasonable fit” for the State’s legislative goal of preventing illegal price-fixing agreements.10 It found the NY AG’s “bare bones” justification for banning software based entirely on public data to be insufficient and concluded that less restrictive alternatives were “easy to imagine.”11 The court illustrated the breadth of the provision by noting that it would bar a landlord from accepting a consultant’s recommendation based on public data, even though “there is nothing untoward about considering prices charged by competitors.”12
- Only a preliminary ruling. The court emphasized that the question was “a close call” and that RealPage is only “marginally” likely to succeed on the merits based on the current record.13 As the parties look ahead towards a hearing on the propriety of a permanent injunction, the court also advised the NY AG that it “should be prepared” to offer a better explanation of how recommendations based entirely on public data could, nevertheless, be harmful to competition.14 The Second Circuit will also have the opportunity to weigh in on the First Amendment implications of pricing algorithm regulations once the proceedings below conclude—or possibly even sooner if an interlocutory appeal is certified.
Conclusion
As states expand their role in antitrust enforcement, so too will the intricate patchwork of state antitrust laws increasingly restrict how companies and individuals operate. O’Melveny will continue to monitor these developments and provide updates as they unfold. For more information, please reach out to one of the attorneys listed on the alert or your regular O’Melveny contact.
1 https://www.gov.ca.gov/2026/09/30/governor-newsom-signs-historic-law-to-stop-big-business-from-shutting-out-competition-cuts-red-tape-to-speed-up-business-permitting/.
2 RealPage, Inc. v. James, No. 25-cv-09847 (VEC) (S.D.N.Y. Sept. 29, 2026).
3 https://leginfo.legislature.ca.gov/faces/billVersionsCompareClient.xhtml?bill_id=202520260AB1776&cversion=20250AB177692AMD.
4 https://www.gov.ca.gov/wp-content/uploads/2026/09/SIGN-msg-AB-1776.pdf.
5 N.Y. Gen. Bus. Law § 340-B(2).
6 Id. at § 340-B(3).
7 RealPage v. James, at 13, 26.
8 Id. at 14-15.
9 Id. at 16-17.
10 Id. at 17-18.
11 Id. at 18-19, n.10. In its opposing brief, the NY AG argued that the distinction between public and non-public data was “difficult to draw,” and both types could be used to generate pricing recommendations. RealPage, Inc. v. James, Defendant’s Memorandum Of Law In Support Of Her Motion To Dismiss The Complaint And In Opposition To Plaintiff’s Motion For A Preliminary Injunction at 20, No. 25-cv-09847 (VEC) (S.D.N.Y. Jan. 9, 2026).
12 Id. at 20-21.
13 Id. at 13.
14 Id. at 20.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Diana Aguilar, an O’Melveny partner licensed to practice law in California and New York; Pete Herrick, an O’Melveny partner licensed to practice law in New York and the District of Columbia; Lauren M. Weinstein, an O’Melveny partner licensed to practice law in New York and the District of Columbia; Sergei Zaslavsky, an O’Melveny partner licensed to practice law in Maryland and the District of Columbia; Adam Walker, an O’Melveny counsel licensed to practice law in the District of Columbia; Jason Yan, an O’Melveny counsel licensed to practice law in Virginia and the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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