Soft Drink Interbrand Competition Act Statement on Signing S. 598 Into Law.

I have signed into law S. 598, the "Soft Drink Interbrand Competition Act." The purpose of this legislation is to "clarify the circumstances under which territorial provisions in licenses to manufacture, distribute, and sell trademarked soft drink products are lawful under the antitrust laws."

Since 1971, soft drink bottlers have been faced with the uncertainty created by pending legal proceedings challenging the legality of territorial provisions in their franchise agreements. As the report of the Committee on the Judiciary of the House of Representatives explains, this legislation is intended simply to eliminate that uncertainty by reaffirming legislatively the rule of reason approach followed by the Supreme Court in Continental T.V. Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977). While I have had misgivings about the language of earlier versions of this bill, I believe that the amendments adopted by the House of Representatives, and agreed to by the Senate, have met the objective of eliminating that uncertainty. The House report emphasizes that the act "does not grant antitrust immunities." Under these circumstances, I do not believe that the bill establishes a special antitrust exemption or permits otherwise illegal restrictions on competition.