California’s clashes over business regulation rage on as legislative session nears end

The state Capitol’s most enduring conflict pits corporate California against four powerful interest groups over new regulations, taxes, minimum wages or other costly mandates.

The specific issues may vary from year to year, although some continue for decades, but the underlying clash of interests is perpetual.

The four groups arrayed against business — unions, personal injury lawyers, consumer advocates and environmentalists — contend their bills are needed to protect consumers, workers or the environment. Business executives see them as driving higher operational costs that threaten companies’ profitability or even existence.

As the Legislature approaches the August 31 adjournment of its two-year session, some of the bills arising from the conflict are still pending, and the contending forces are applying maximum pressure to affect the outcomes.

One example is Assembly Bill 2564, carried by Assemblymember Christopher Ward, a San Diego Democrat, on behalf of unions, consumer groups and advocates for the poor.

It would prohibit retailers from engaging in “surveillance pricing,” which is a form of algorithmic pricing in which sellers use personal information to tailor prices to specific consumers.

Backers of the bill say it’s needed to avoid discrimination, while retailers say the measure could eliminate coupons and other forms of price discounts for loyal customers, thus raising the cost of living in an already expensive state.

The most important measure still pending in the Legislature, at least from the standpoint of California’s overall business climate, is Assembly Bill 1776, authored by Assemblymember Cecilia Aguiar-Curry, a Democrat from Davis.

It would broaden California’s anti-monopoly Cartwright Act, first enacted in 1907 to allow civil or criminal actions against corporations that monopolize markets.

The Cartwright Act, which has been amended several times since its enactment, resembles the federal Sherman Antitrust Act in several regards but is broader in its reach. It still is aimed at collusion between two or more corporations to stifle competition and raise prices. But AB 1776 would also sanction actions against corporations that become dominant without colluding.

The change was recommended by the California Law Revision Commission to curb monopolistic behavior framers of the original law never envisioned. It is backed by a long list of consumer advocates and unions.

Business interests led by the California Chamber of Commerce see it as opening the door to lawsuits that would penalize corporations for earning market shares honorably vis-à-vis long-established practices.

Until a few days ago, the bill also would have allowed lawyers to instigate lawsuits on their own, a provision known as “private right of action,” which opponents found particularly onerous. That provision was removed after the bill narrowly passed the Assembly and moved to the Senate floor, thus limiting its enforcement to the attorney general or local prosecutors.

The California Chamber of Commerce is still steadfastly opposed. It contends the bill still allows crackdowns on corporations that are just operating normally, penalizing them for success in gaining substantial market power.

“The author and sponsors of AB 1776 have never brought forward specific, real-world examples of the behavior they are seeking to change,” Chamber spokesperson John Myers said in a statement. “That’s why we’ve often seen this as a ‘solution in search of a problem,’ the kind of fundamental flaw that makes legislative negotiations extremely difficult, if not impossible.”

Whatever happens on these two bills, and a few others, by August 31, the Capitol’s big game of high-stakes political poker will resume when the Legislature reconvenes in December with some new members and a new governor, who will be inaugurated in January.