The Source Blog

On February 10, 2026, California Governor Gavin Newsom signed SB 25 into effect, enacting the California Uniform Antitrust Premerger Notification Act.  Introduced by Senator Tom Umberg, the new law mandates that companies required to file federal premerger notifications under the federal Hart-Scott-Rodino (HSR) Act also file the information with the California Attorney General.  California is following Washington and Colorado in enacting a version of the Uniform Antitrust Premerger Notification Act, model legislation proposed by the Uniform Law Commission.  Although the new law gives no new enforcement powers, it expands the state’s visibility of merger activity.  California has existing laws that require notification to the state of healthcare, grocery, and drug M&As; this bill expands notice to mergers that meet minimum requirements in all fields.

The Road to SB25

California, along with multiple other states across the country, is introducing and enacting protection against antitrust conduct.  In 2022, California created the Office of Healthcare Affordability (OHCA) to monitor the state's healthcare market trends and assess the impact of mergers and acquisitions on affordable healthcare access.  California is currently on a trend of expanding antitrust regulatory powers beyond healthcare – enacting general antitrust laws to protect consumers further – with SB 763 and AB 325.  SB763, signed in October of 2025 by Governor Newsom, increases penalties for violations of the Cartwright Act from $1 million per violation to $6 million per violation, and allows for cumulative penalties.  AB 325, also enacted in October 2025, prohibits the use of pricing algorithms to influence pricing in an effort to decrease competition in a given market while also easing the threshold plaintiffs need to allege in Cartwright Act claims.  Further, as discussed in the February blog post, AB 1776 has been introduced as the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy (COMPETE) Act, a culmination of the multi-year study conducted by the California Law Revision Commission.  While the bill changes only one word, its effect is far-reaching, extending states' antitrust enforcement to apply to "one or more persons" rather than "two or more persons," allowing increased regulation of single-firm conduct.

The Hart-Scott-Rodino (HSR) Act

In 1976, the HSR Act was enacted, requiring prior notification of mergers to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) so that a thorough review of potential harms and/or benefits of the merger could be completed proactively instead of relying on a "relief after-the-fact" ideology that left enforcement inefficient.  The act was instrumental in preventing chaotic post-merger divestitures when the FTC and DOJ deemed them anticompetitive.  In effect, the act provided an opportunity to extinguish anticompetitive conduct before it was cemented, aligning with the Clayton Act's guidance.  In its notification, the companies are required to submit detailed information relating to their intended merger, including their financial portfolios and the proposed deal specifics.

Before SB 25, California would have had to request the submitted premerger notification documents from the federal FTC and DOJ if it needed to review relevant mergers.  Now, companies whose principal place of business (PPB) or have a significant portion of their business is in California are mandated to submit a copy of their HSR documents to the state Attorney General within one business day of their federal submission, or face civil penalties.

Antitrust Premerger Notification Regulation Trends

California’s latest antitrust legislation efforts are in line with several other states that have also introduced and/or signed into law similar policies known as "baby HSR acts," including Colorado, DC, Hawaii, Indiana, New York, Washington, and West Virginia.  Ultimately, SB 25 and similar state laws were modeled after the Uniform Antitrust Premerger Notification Act.  The act provides states with specific guidance on how to draft legislation mandating simultaneous submission to their state AGs when federal notifications are filed, in hopes of creating uniformity across state requirements for such policies.  States flexing their power to police antitrust enforcement is consistent with a variety of state AGs seeking to play a more integral role in merger oversight.  While most state AGs currently have the authority to investigate and bring enforcement against such conduct, there is still much to be done to expand that authority.

The Uniform Antitrust Premerger Notification Act is model legislation from the Uniform Law Commission (ULC), which was formed in 1892 to promote the “enactment of uniform acts in areas of state law where uniformity is desirable and practical.”  It appears to be non-partisan, and its biggest success to date has been the enactment of the Uniform Commercial Code, the set of state laws governing all commercial transactions in the United States.  Although the Uniform Law Commission is obviously attempting to get states to adopt a consistent version of its model language, there are differences between what SB25 does and what the ULC's language requires.  The uniform law requires mergers to file paperwork simultaneously with the federal and state government; the California law gives one business day beyond the federal filing to file with the state.  The uniform law has no filing fee; the California version charges $500 or $ 1,000, depending on the transaction.  Also, the California law adds a requirement that the AG provide a secure place to store information relating to the merger; the uniform law does not.

Gaps in Current Antitrust Policies

In much the same vein as previous antitrust policies, SB 25 is purely a transparency measure – it does not expand or strengthen an AG's authority to block, delay, or impose new requirements, or create new standards that must be adhered to regarding a merger.  It begs the question – what can the AG do to block such conduct?  While there is no requirement for the AG to approve mergers before they are completed, the office can still file suit to stop anticompetitive mergers.

In 1990, the Supreme Court concurred with the State in California v. American Stores Co. Upon acquiring multiple grocery stores that more than doubled their current stores, the State of California brought an action seeking a preliminary injunction, requiring American to operate their new stores separately, as well as a divestiture order.  The order, if passed, would mandate that American divest itself of the new acquisitions within the state from the merger.  American sued, claiming that California had overreached its authority, but the Court found for California, noting that divestitures are a valid means of enforcing antitrust violations prohibited by the Clayton Act.  The case critically highlights the power and method(s) a state can wield when premerger notification policies are insufficient in protecting consumers and competition.

In culmination with SB 25, other similarly enacted laws in California, and the authority set out by American, AGs actually have a wide breadth of authority to mitigate harmful antitrust conduct by being notified of mergers early, proactively investigating potentially injurious mergers, and utilizing the courts to block or divest companies found to be in violation of state law.  In 2024, Governor Newsom vetoed AB 3129, which would have been a potential game-changer by providing significant unilateral authority over healthcare mergers – allowing such mergers only upon the AG's affirmative consent.  Although it died upon arriving at the Governor's desk, the state appears to be casting a wide net to address shortcomings in state antitrust law.

SB 25 and Healthcare in California

The expansion of transparency SB 25 brings to the state's healthcare market is invaluable.  Consolidation in healthcare, along with its negative impact on healthcare costs, access, and quality, is a significant problem the state is seeking to remedy.  With the mandate for premerger notifications through OHCA, in conjunction with SB 25, the state now has a broader view of market activity across healthcare and other industries affecting Californians.  Because of SB 25's mandate to submit HSR reports to the state AG, there is a greater likelihood of proactive, efficient monitoring of healthcare mergers, allowing for more time to investigate and pursue injunctive and/or divestiture court actions as necessary to ensure affordable healthcare for all.  In contrast to the previous framework, which provided only for post-merger remedies, all the newly enacted laws, including SB 25, allow for affirmative action before harmful mergers close, ensuring effective and timely intervention in response to potentially harmful conduct.

Attorney General Rob Bonta stated that the new law does not expand required M&A disclosures or create new approval requirements, but is intended to facilitate coordination between state and federal enforcement, and to provider earlier access to M&A materials.  California’s Senior Assistant AG for the Antitrust Section added that the state just wants to get filings at the same time as the federal government, that the vast majority of mergers present no competition issues, and that the state doesn’t plan to open 100 new merger cases.

Who is Opposed

Many corporate entities are concerned about the ancillary effects SB 25 will have.  CTIA, a wireless communications organization, stated that the law requires unrealistic requirements due to the additional administrative load it creates.  Similarly, privacy concerns about confidential business rulings potentially being leaked during the investigative process have been raised.  However, SB 25 has taken such concerns into account and clearly specifies that confidentiality is paramount, as leaked materials could lead to anticompetitive actions.  Upon implementation of SB 25, California will treat the highly sensitive nature of such documents with the utmost care and require confidentiality, as federal agencies do.

What Lies Ahead

SB 25 goes into effect at the start of 2027, suggesting it may take substantial time for the law's benefits to materialize.  Before that time, corporations and companies looking at future transactions will need to become familiar with the states' newest compliance standards in addition to what is already required at the federal level.

Whether SB 25, in conjunction with California's evolving proactive antitrust policies, will sufficiently reduce antitrust harms without direct unilateral AG authority to stop transactions remains to be seen.  The Source will continue to track new regulatory developments and their impact on the cost of and access to quality, affordable healthcare in California.

Download PDF