- Phoebus cartel
The Phoebus cartel was a
cartel of, among others,Osram ,Philips andGeneral Electric fromDecember 23 1924 until 1939 that existed to control the manufacture and sale oflight bulb s.The cartel reduced competition in the light bulb industry for almost twenty years, and has been accused of preventing technological advances that would have produced longer-lasting light bulbs. However, the Phoebus cartel is also featured in fictionalized form as a plot element in
Thomas Pynchon 's novel "Gravity's Rainbow ", which has led to some blurring of fact and fiction.Phoebus was officially a Swiss corporation named "Phoebus S.A. Compagnie Industrielle pour le Developpement de l’Eclairage".
Members
Osram, Philips, Tungsram, Associated Electrical Industries, Compagnie des Lampes, International General Electric, and the GE Overseas Group were members of the Phoebus cartel. They owned shares in the Swiss corporation proportional to their lamp sales.
Purpose
The cartel served as a convenient way to lower costs and decrease the life expectancy of light bulbs, while at the same time hiking prices without fear of competition. Standardization of lightbulbs was another side-effect of the cartel.
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 worldDemise
In the late twenties a Swedish-Danish-Norwegian union of companies 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.
The original Phoebus agreement was intended to expire in 1955, however, the beginning of World War II greatly disrupted the operation of the cartel. Remnants of the Phoebus cartel were revived in 1948.
References
See also
*
Internationale Gluhlampen Preisvereinigung
*General Electric External links
* Patrick Gaughen. [http://www.andover.edu/aep/papers/610/pgaughen98.pdf Structural Inefficiency in the Early Twentieth Century: Studies in the Aluminum and Incandescent Lamp Markets] (Adobe .pdf format)
* [http://www.competition-commission.org.uk/rep_pub/reports/1950_1959/003lamp.htm U K Monopolies Commission Report on the Supply of Electric Lamps 1951]
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