2 California Bills Could Ban Startup Personalization and Expand Antitrust

For early-stage companies building on personalization, dynamic pricing, and aggressive market-share strategies, California's Aug 31 legislative deadline carries outsized risk. AB 2564 would prohibit using personal information to tailor prices—a common growth tactic—and retailers warn it could wipe out coupons and loyalty discounts that startups rely on to acquire customers, while AB 1776's expansion of Cartwright Act liability could chill competitive pricing, bundling, and M&A moves.

California's legislative session is careening toward its August 31, 2026 adjournment with the state's most persistent political conflict once again at full boil. Daily News and Press Telegram reporting published in the final week of August frames the fight as corporate California versus four powerful interest groups—unions, personal injury lawyers, consumer advocates, and environmentalists—over new regulations, taxes, minimum wages, and other costly mandates. Business executives argue the measures drive up operational costs and threaten profitability or even survival. Two unresolved bills as of August 24 illustrate the stakes: Assembly Bill 2564, which would prohibit algorithmic 'surveillance pricing,' and Assembly Bill 1776, which would expand the 1907 Cartwright Act.

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Two unresolved bills as of August 24 illustrate the stakes: Assembly Bill 2564, which would prohibit algorithmic 'surveillance pricing,' and Assembly Bill 1776, which would expand the 1907 Cartwright Act.

The conflict is perennial because the contending forces are structurally matched and the stakes are persistent. The interest groups contend their bills protect consumers, workers, or the environment; business groups counter that California already imposes among the nation's highest operational costs, and that the cumulative weight of mandates can push companies out of the state. The final week before adjournment concentrates maximum pressure on lawmakers, with late amendments, committee maneuvering, and floor votes determining which proposals become law. Lobbying activity peaks in the final days, as both sides seek to move allies on committees and secure veto threats from the governor. Because California is the largest state economy and a regulatory bellwether, the outcomes matter far beyond Sacramento.

AB 2564, carried by Assemblymember Christopher Ward, a San Diego Democrat, on behalf of unions, consumer groups, and advocates for the poor, would prohibit retailers from engaging in 'surveillance pricing'—a form of algorithmic pricing in which sellers use personal information to tailor prices to specific consumers. Supporters say the bill is needed to avoid discrimination, especially as data-driven personalization becomes more sophisticated. Retailers warn that the measure could eliminate coupons and other forms of price discounts for loyal customers, raising the cost of living in an already expensive state. The bill reflects a broader regulatory shift toward scrutinizing algorithmic decision-making, dynamic pricing, and personalized commerce at the state level, beyond federal privacy and antitrust frameworks.

AB 1776, authored by Assemblymember Cecilia Aguiar-Curry, a Democrat from Davis, is described as the most important pending measure from the standpoint of California's overall business climate. 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. Expanding it could expose companies to a wider set of enforcement actions, private suits, and criminal exposure. If California courts interpret the amendments aggressively, the state could become an even more significant antitrust venue, especially for technology platforms, retailers, and dominant service providers.