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Phoebus cartel

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Phoebus cartel
PredecessorInternationale Glühlampen Preisvereinigung
Formation15 January 1925
FoundersOsram,General Electric,Associated Electrical Industries,TungsramandPhilipsamong others
Founded atGeneva,Switzerland
Dissolved1939;85 years ago(1939)
TypeCartel
ProductsIncandescent light bulbs

ThePhoebus cartelwas an internationalcartelthat controlled the manufacture and sale ofincandescent light bulbsin much ofEuropeandNorth Americabetween 1925–1939. The cartel took overmarketterritories and lowered the useful life of such bulbs, which is commonly cited as an example ofplanned obsolescence.[1]

Corporations based in Europe and the United States, includingTungsram,Osram,General Electric,Associated Electrical Industries,andPhilips,[2]incorporatedthe cartel on January 15, 1925 inGeneva,[3]asPhœbusS.A.Compagnie Industrielle pour le Développement de l'Éclairage(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 ofWorld War II.

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

History

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Osram,Philips,Tungsram,Associated Electrical Industries,ELIN[de],Compagnie des Lampes,InternationalGeneral 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, theInternationale 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 andmarket 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.[5][6]

The Phoebus cartel's compact was intended to expire in 1955, but it was instead nullified in 1940 afterWorld War IImade coordination among the members impossible.[6]

Purpose

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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]while raising prices without fear of competition. The reduction in lifespan has been cited as an example ofplanned obsolescence,[7]but this has been called into question by UK government regulators and some independent engineers because there are some good engineering reasons to reduce the lifespan of a bulb. A longer life bulb of a given wattage puts out less light (and proportionally more heat) than a shorter life bulb of the same wattage.[8][9]Nevertheless, both internal comments from cartel executives[6]and later findings by a US court[10]suggest that the direct motive of the cartel in decreasing bulb lifespan 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 ofSwiss francspaid that depended on the exceeding hours of lifetime.[11]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."[6]

In 1951, theMonopolies and Restrictive Practices Commissionin the United Kingdom issued a report toParliament,which disputed the idea that the Phoebus cartel engaged in planned obsolescence, stating that "there can be no absolutely right life [of light bulbs] 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".[8]

In 1949, theUnited States District Court for the District of New JerseyfoundGeneral Electricto have violated theSherman Anti-Trust Act,in part because of their activities as part of the Phoebus Cartel. As part of the decision, while acknowledging that "it should be borne in mind that the life of a lamp is inextricably related to the power of its light", it nonetheless found that because of General Electric's dominant industry position and lack of competition it had the power to determine bulb lifespan across the entire industry, and that General Electric's main consideration in setting the lifespans of bulbs was profit. The court used this as one of the factors for ultimately determining that General Electric had violated the Act.[10]

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InGravity's Rainbow(1973),Thomas Pynchonwrote about "Byron the Bulb", an anthropomorphic eternal lightbulb who fights against the Phoebus Cartel. Pynchon's novel has been credited with bringing the Phoebus Cartel to the public eye.[12][13]

See also

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References

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  1. ^MacKinnon, J. B. (14 July 2016)."The L.E.D. Quandary: Why There's No Such Thing as" Built to Last "".The New Yorker.ISSN0028-792X.Archivedfrom the original on 14 November 2017.Retrieved5 November2017.
  2. ^Metze, Marcel "Anton Philips (1874-1951). They will know who they're dealing with", Uitgeverij Balans, Amsterdam, 2004,ISBN90 5018 612 2(Summary)Archived2014-04-13 at theWayback Machine.
  3. ^Feuille officielle suisse du commerce.Berne. 7 February 1925. p. 216.{{cite book}}:CS1 maint: location missing publisher (link)
  4. ^"Corporations: A Very Tough Baby".Time Magazine.23 July 1945. Archived fromthe originalon 1 August 2009.Retrieved11 April2009.
  5. ^Jürgen Bönig (1993).Die Einführung von Fliessbandarbeit in Deutschland bis 1933(in German). LIT Verlag Münster. p. 277.ISBN3894731117.Archivedfrom the original on 1 July 2016.Retrieved3 May2016.
  6. ^abcdefMarkus Krajewski (24 September 2014)."The Great Lightbulb Conspiracy".IEEE Spectrum.Archivedfrom the original on 29 October 2017.Retrieved3 November2017.
  7. ^Briefing. Planned obsolescence: Exploring theissueeuropa.eu
  8. ^abMonopolies and Restrictive Practices Commission (1951).Report on the Supply of Electric Lamps(PDF).London: His Majesty's Stationery Office. p. 98.ISBN010518487X.Archived(PDF)from the original on 5 September 2019.Retrieved14 April2020.
  9. ^Hehkulampussa ja ledissä sama ongelma: lämpöArchived2011-10-15 at theWayback Machine,Suomen Kuvalehti13.10.2011, an interview of research scientist, D.Sc.Eino Tetri,Leader of the Light Sources and Energy Group inAalto University
  10. ^abUnited States v. General Electric Co. et al.,82 F.Supp. 753(D.N.J. 1949).
  11. ^Peretti, Jacques (July 2014)."The Men Who Made Us Spend, Episode 1".BBC.Archivedfrom the original on 7 July 2014.Retrieved10 July2014.
  12. ^"The Story Behind the Story Behind" The Great Lightbulb Conspiracy "- IEEE Spectrum".
  13. ^"The Phoebus Cartel: Planet Money".NPR.Archivedfrom the original on 8 February 2023.

Further reading

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