Phoebus cartel

The Phoebus cartel existed to control the manufacture and sale of incandescent light bulbs. They appropriated market territories and fixed the useful life of such bulbs.[1] Corporations based in Europe and America founded the cartel on January 15, 1925 in Geneva.[2] Phoebus based itself in Switzerland. The corporation named itself Phœbus S.A. Compagnie Industrielle pour le Développement de l'Éclairage (French for "Phoebus, Inc. Industrial Company for the Development of Lighting").They had intended the cartel to last for thirty years (1925 to 1955). The cartel ceased operations in 1939 owing to the outbreak of World War II. The cartel included manufacturers Osram, General Electric, Associated Electrical Industries, and Philips,[3] among others.

Phoebus cartel
Formation15 January 1925
Extinction1939
TypeCartel

History

Osram, Philips, Tungsram, Associated Electrical Industries, ELIN, Compagnie des Lampes, International General Electric, and the GE Overseas Group created and joined the Phoebus cartel,[4] holding shares in the Swiss corporation proportional to their lamp sales.

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 between all the major companies to control and restrict their respective activities in order not to interfere in each other's spheres.[5][6]

In the late 1920s, a Swedish-Danish-Norwegian union of companies (the North European Luma Co-op Society) planned 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.[7]

The Phoebus planned to expire their cartel in 1955;[6] however, World War II greatly disrupted the operation of the cartel.

Purpose

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

The cartel lowered operational costs and worked to standardize the life expectancy of light bulbs at 1,000 hours[6] (down from 2,500 hours),[6] and raised prices without fear of competition. 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.[8]

Some engineers deemed the life expectancy of 1,000 hours reasonable for most bulbs, and that a longer lifetime came at the expense of efficiency. Engineers argued that longer bulb life caused the increase of heat and decrease of light if bulbs lasted longer than 1,000 hours. They argued the result of wasted electricity.[9] Long-life incandescent bulbs were available that lasted up to 2,500 hours. These were less energy-efficient, producing less light per watt.[10]

In 1951, Monopolies and Restrictive Practices Commission in the United Kingdom issued a report to Parliament and noted that:

"As regards life standards, before the Phoebus Agreement and to this day the general service filament lamp was and is designed to have, on average, a minimum life of 1,000 hours. It has often been alleged—though not in evidence to us—that the Phoebus organisation artificially made the life of a lamp short with the object of increasing the number of lamps sold. As we have explained in Chapter 9. there can be no absolutely right life for the many varying circumstances to be found among the consumers in any given country, so that any standard life must always represent a compromise between conflicting factors. B.S.I, has always adopted a single life standard for general service filament lamps, and the representatives of both B.S.I, and B.E.A., as well as most lamp manufacturers, have told us in evidence that they regard 1,000 hours as the best compromise possible at the present time, nor has an evidence been offered to us to the contrary. Accordingly we must dismiss as misconceived the allegation referred to above."[11]

References
  1. 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. Archived from the original on 2017-11-14. Retrieved 2017-11-05.
  2. Feuille officielle suisse du commerce. Berne. February 7, 1925. p. 216.
  3. Metze, Marcel "Anton Philips (1874-1951). They will know who they're dealing with", Uitgeverij Balans, Amsterdam, 2004, ISBN 90 5018 612 2 (Summary) Archived 2014-04-13 at the Wayback Machine.
  4. "Corporations: A Very Tough Baby". Time Magazine. 1945-07-23. Archived from the original on 2009-08-01. Retrieved 2009-04-11.
  5. Jürgen Bönig (1993). Die Einführung von Fliessbandarbeit in Deutschland bis 1933 (in German). LIT Verlag Münster. p. 277. ISBN 3894731117. Archived from the original on 2016-07-01. Retrieved 2016-05-03.
  6. Markus Krajewski (24 September 2014). "The Great Lightbulb Conspiracy". IEEE Spectrum. Archived from the original on 29 October 2017. Retrieved 3 November 2017.
  7. A history of pre-war lightbulb manufacture Archived 2015-06-14 at the Wayback Machine, 14-04-2015,
  8. Peretti, Jacques (July 2014). "The Men Who Made Us Spend, Episode 1". BBC. Archived from the original on 2014-07-07. Retrieved 2014-07-10.
  9. Hehkulampussa ja ledissä sama ongelma: lämpö Archived 2011-10-15 at the Wayback Machine, 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
  10. "Incandescent, LED, Fluorescent, Compact Fluorescent and Halogen Bulbs". Archived from the original on 2012-07-28.
  11. Monopolies and Restrictive Practices Commission (1951). Report on the Supply of Electric Lamps (PDF). London: His Majesty's Stationery Office. p. 98. ISBN 010518487X. Archived (PDF) from the original on 2019-09-05. Retrieved 2020-04-14.

Further reading
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