Phoebus cartel

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 1925–1939. The cartel took over market territories and lowered the useful life of such bulbs, which raised their efficiency and output. Corporations based in Europe and the United States, including Osram, General Electric, Associated Electrical Industries, and Philips, incorporated the cartel on January 15, 1925 in Geneva, as Phœbus S.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 of World War II. Following its dissolution, light bulbs continued to be sold at the 1,000 hour life standardized by the cartel. Osram, Philips, Tungsram, Associated Electrical Industries, ELIN, Compagnie des Lampes, International General Electric, and the GE Overseas Group created and joined the Phoebus cartel, 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 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 was intended to be dissolved in 1955 but World War II greatly disrupted its operation. The cartel lowered operational costs and worked to standardize the life expectancy of light bulbs at 1,000 hours (down from 2,500 hours), while raising prices without fear of competition. Some sources have asserted that this is an example of planned obsolescence, but this has been disputed.