Budget Writers and Experts Agree: AB 1776 Will Worsen California’s Deficit

Two new estimates - including one from the California Department of Finance - affirm what experts have been saying for months: legislation to rewrite the state's robust antitrust law would wreak havoc on the Golden State's economy and the tax dollars needed to fund vital government programs.

The analyses come just days before the Senate Appropriations Committee is scheduled to vote on Assembly Bill 1776 (Aguiar-Curry; D-Winters), a bill opposed by the California Chamber of Commerce and a diverse coalition including small businesses across the state.

CalChamber has scored AB 1776 as a significant Cost Driver that's likely to worsen California's affordability crisis and launched a multimillion-dollar public awareness advertising campaign to bring attention to the bill's devastating impacts.

"Supporters of AB 1776 often downplay its potential impact," write the authors of a new economic analysis by the Computer & Communications Industry Association (CCIA), a global not-for-profit trade association representing a broad cross section of communications and technology firms. CCIA's report notes that "the bill's own text tells a much more radical story."

State Budget Writers Now Oppose AB 1776

The business community's concerns over the proposal to expand antitrust law to business practices involving a single firm - and to provide a so-called "private right of action" to allow virtually anyone to file legal action against a company - are echoed in a new staff analysis by the California Department of Finance (DOF), the government office that sets the agenda for each year's state budget.

"Finance is opposed to this bill because it results in significant new state costs not included in the 2026 Budget Act," the department's analysts wrote in the review presented to the Senate Appropriations Committee.

The DOF analysis says state prosecutors would be saddled with "unknown but potentially significant costs" if AB 1776 were to become law - casting doubt on whether existing programs "would be able to absorb these costs."

Recent estimates are that California's state budget is likely to experience multibillion-dollar deficits in the coming years.

CCIA's Latest Review: $670 Billion in Lost GDP

As AB 1776 has made its way through the legislative process, CCIA researchers have continued to update their economic analysis in line with late amendments - changes to the bill that CalChamber and other opponents believe have done little to improve the proposal's impact on businesses of all sizes.

Last week, CCIA issued an analysis based on the current version of the bill, estimating a $670 billion loss in state GDP over the coming decade if AB 1776 becomes law.

Researchers offered a troubling case study in their report on the bill's impact on California startup businesses, one of the most dynamic parts of the state's technology sector and its nation-leading innovation economy. These fledgling efforts alone could account for as much as $8.6 billion in lost GDP over the next 10 years.

The CCIA report echoed what business groups have told lawmakers: The simple loosening of standards for who can file an antitrust lawsuit would trigger costs the supporters overlook in their pledge to exempt certain businesses from the new law.

"Supporters of AB 1776 point to its narrow exemption for startups, but that exemption does not prevent a startup from being sued," write the researchers. "Rather, a startup would have to respond to a lawsuit by demonstrating that it falls within the exemption, requiring substantial legal defense spending."

CCIA notes that median early-stage funding for startups in 2025 was $3 million, an amount far eclipsed by litigation estimates of $25 million, as calculated last year by federal and state antitrust enforcement officials.

"In other words," the researchers note, "a single antitrust case can doom most startups."