California
California is a leader in enacting new policies and regulations, and other states, particularly in the West and Pacific Northwest, follow California’s lead and adopt similar policies. California has over 4.15 million small businesses (SMBs) employing over 7.5 million people. Policymakers must consider the impacts of new laws and regulations on SMBs before supporting legislation.
Key Policy Issues
Antitrust
COMPETE Act (AB 1776)
Overview: AB 1776 would change California antitrust law to discourage digital platforms from integrating products and services that save small businesses money.
The Problem: AB 1776 places widely used digital tools in legal jeopardy. Uncertainty will discourage innovation, delay product development, and increase the cost of integrated services small businesses rely on every day.
The Impact: While the bill is aimed at large tech companies, California’s small businesses will be hit the hardest. The COMPETE Act won’t promote competition—it will cost every small business more than $16,000 per year in lost sales, contributing to a $365 billion loss over the next five years.
Bill sponsor: Assemblymember Cecilia Aguiar-Curry
Status: AB 1776 passed the California Legislature on August 30, 2026. The Senate approved the bill 30-9, and the Assembly voted 60-16 to concur in Senate amendments. The bill now heads to Governor Gavin Newsom, who has until September 30 to sign or veto it.
Digital Economy
Prohibition on Digital Promotions (AB 2564)
Overview: California small businesses use basic data to offer promotions that help them attract customers, build loyalty, and compete with larger chains. These promotions include discounts for loyal patrons, special offers on items left in customer’s online shopping carts, and coupons for people likely to be interested in their products or services.
The Problem: AB 2564 would restrict small businesses’ ability to use basic data to offer common promotions, making it harder for them to grow and compete.
The Impact: AB 2564 will drive prices up for small businesses using digital tools across California by creating litigation risks for businesses that offer digital tools and services.
Bill sponsor: Assemblymember Chris Ward, Assemblymember Ash Kalra
Status: AB 2564 passed the Senate 22-14 on August 31, 2026, but the Assembly adjourned without taking a final vote on the Senate amendments. As a result, the bill did not pass the Legislature and will not become law this session.
Key Officials
Stay Informed
Stay up to date on the latest issues facing digitally empowered small businesses and get access to exclusive events and resources by signing up here.
Spotlight: 3C Small Business Advocates in California
AI Helps ASM Games Triple its Annual Output
Empowering Students to Overcome Boundaries with Oppti
If You Can Dream It, You Can Achieve It: A Baker’s Digital Journey
When Life Gives You Lemons: Lucy’s Online Success
A Better Treat
Jeff’s Famous Jerky
Mariposa Coffee Company
Digital Tools are a Starting Point for Success
Digital Tools Are Sweet For One Small Business
ASM Games Wins Big with Amazon
Feliciano’s Peninsula Party Success
