The Phoebus cartel was a cartel that existed to control the manufacture and sale of incandescent light bulbs by appropriating market territories and fixing the useful life of bulbs. Founded on December 23, 1924 for thirty years (1925 to 1955), it was suspended in 1939 due to World War II. The cartel included manufacturers Osram, General Electric, Associated Electrical Industries, and Philips, among others.
The Phoebus cartel is a notable landmark in the history of the global economy because it engaged in large-scale planned obsolescence to generate repeated sales and maximise profit. It also reduced competition in the light bulb industry for almost fifteen years, and has been accused of preventing technological advances that would have produced longer-lasting light bulbs. Phoebus was a Swiss corporation named Phœbus S.A. Compagnie Industrielle pour le Développement de l'Éclairage (French for "Phoebus, Inc. Industrial Company for the Development of Lighting").
Osram, Philips, Tungsram, Associated Electrical Industries, ELIN, Compagnie des Lampes, International General Electric, and the GE Overseas Group were members of the Phoebus cartel, holding shares in the Swiss corporation proportional to their lamp sales.
In 1921 a precursor organisation was founded by Osram, the "Internationale Glühlampen Preisvereinigung". When Philips and other manufacturers were entering 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 between all the major companies to control and restrict their respective activities in order not to interfere in each other's spheres.
The cartel was a convenient way to lower costs and worked to standardize the life expectancy of light bulbs at 1,000 hours (down from 2,500 hours), while at the same time raising prices without fear of competition. Members' bulbs were regularly tested and fines were levied for bulbs that lasted more than 1,000 hours. A 1929 table lists exactly how many Swiss francs had to be paid, depending on the exceeding hours of lifetime. This was not public knowledge at the time, and the cartel could point to standardization of light bulbs as an alternative rationale for the organization.
Some engineers say that 1,000 hours was a reasonable optimum life expectancy for most bulbs, and that a longer lifetime could be obtained only at the expense of efficiency, since progressively more heat and less light is obtained, resulting in wasted electricity. Long-life incandescent bulbs are available today which last up to 2,500 hours; the trade off is that long-life bulbs are less energy efficient and produce less light per watt.
The Phoebus cartel divided the world’s lamp markets into three categories:
- home territories, the home country of individual manufacturers
- British overseas territories, under control of Associated Electrical Industries, Osram, Philips, and Tungsram
- common territory, the rest of the world
In the late 1920s a Swedish-Danish-Norwegian union of companies (the North European Luma Co-op Society) began planning an independent manufacturing center. Economic and legal threats by Phoebus did not achieve the desired effect, and in 1931 the Scandinavians produced and sold lamps at a considerably lower price than Phoebus.
In popular culture
- Thomas Pynchon's 1973 novel Gravity's Rainbow, based on conspiracies and paranoia, has a chapter about the Phoebus cartel. Titled "The Story of Byron the Bulb", it features a fictional immortal light bulb tracked across Europe by the cartel.
- MacKinnon, J. B. (2016-07-14). "The L.E.D. Quandary: Why There's No Such Thing as "Built to Last"". The New Yorker. ISSN 0028-792X. Retrieved 2017-11-05.
- Metze, Marcel "Anton Philips (1874-1951). They will know who they're dealing with", Uitgeverij Balans, Amsterdam, 2004, ISBN 90 5018 612 2 (Summary).
- "Corporations: A Very Tough Baby". Time Magazine. 1945-07-23. Retrieved 2009-04-11.
- Jürgen Bönig (1993). Die Einführung von Fliessbandarbeit in Deutschland bis 1933 (in German). LIT Verlag Münster. p. 277. ISBN 3894731117.
- Markus Krajewski (24 September 2014). "The Great Lightbulb Conspiracy". IEEE Spectrum.
- Peretti, Jacques (July 2014). "The Men Who Made Us Spend, Episode 1". BBC.
- Hehkulampussa ja ledissä sama ongelma: lämpö, Suomen Kuvalehti 13.10.2011, an interview of research scientist, D.Sc. Eino Tetri, Leader of the Light Sources and Energy Group in Aalto University
- "Incandescent, LED, Fluorescent, Compact Fluorescent and Halogen Bulbs". Archived from the original on 2012-07-28.
- A history of pre-war lightbulb manufacture, 14-04-2015,
- Thomas Pynchon, Gravity's Rainbow, "The Story of Byron the Bulb" (p. 647–655), p. 648.
- Wells, Wyatt C. (2002). Antitrust and the Formation of the Postwar World. New York: Columbia University Press. ISBN 0-231-12398-1.
- 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