The Phoebus cartel was an international cartel that controlled the manufacture and sale of incandescent light bulbs in much of Europe and North America between 1925 and 1939. The cartel took over market territories and lowered the useful life of such bulbs, which is commonly cited as an example of planned obsolescence.

Corporations based in Europe and the United States, including Tungsram, Osram, General Electric, Associated Electrical Industries, and Philips, incorporated the cartel on 15 January 1925 in Geneva, as (French for "Phoebus plc Industrial Company for the Development of Lighting"). Although the group had intended the cartel to last for thirty years (1925 to 1955), it ceased operations in 1939 with the outbreak of World War II.

Following its dissolution, light bulbs continued to be sold at the 1,000-hour life standardized by the cartel.

History

Osram, Philips, Tungsram, Tokyo Electric, holding shares in the Swiss corporation proportional to their lamp sales.

thumb|Structure of the cartel

Osram founded a precursor organisation in 1921, the Internationale Glühlampen Preisvereinigung. When Philips and other manufacturers entered the American market, General Electric reacted by setting up the "International General Electric Company" in Paris. Both organisations co-ordinated the trading of patents and market penetration. Increasing international competition led to negotiations among all the major companies to control and restrict their respective activities in order not to interfere in each other's spheres.

The Phoebus cartel's compact was intended to expire in 1955, but it was instead nullified in 1940 after World War II made coordination among the members impossible. Regulators in the UK and some independent engineers have noted that there are benefits to shorter bulb lifespans, as shorter-life bulbs can be brighter for the same wattage. Nevertheless, both internal comments from cartel executives suggest that the cartel's direct motivation for the change was to increase profits by forcing customers to buy bulbs more frequently.

The cartel tested their bulbs and fined manufacturers for bulbs that lasted more than 1,000 hours. A 1929 table listed the amount of Swiss francs paid that depended on the exceeding hours of lifetime. Anton Philips, head of Philips, said to another cartel executive, "After the very strenuous efforts we made to emerge from a period of long life lamps, it is of the greatest importance that we do not sink back into the same mire by paying no attention to voltages and supplying lamps that will have a very prolonged life."

See also

  • Centennial Light
  • The Light Bulb Conspiracy
  • Competition law
  • The Man in the White Suit (1951)

References

Further reading

  • Patrick Gaughen "Structural Inefficiency in the Early Twentieth Century: Studies in the Aluminum and Incandescent Lamp Markets" Social Science 610, December, 1998, 36 pp.
  • U K Monopolies Commission "Report on the Supply of Electric Lamps", His Majesty's Stationery Office, London, October 1951, v + 199 pp.
  • Markus Krajewski "The Great Lightbulb Conspiracy" IEEE Spectrum, September, 2014.
  • Cosima Dannoritzer "The Light Bulb Conspiracy - Extended Video Version" New World News Network, August 8, 2016
  • Planet Money Podcast "Episode 902: The Phoebus Cartel" npr.org, 27 March 2019