Early on, as the world switched to electric indoor lighting, the world’s leading light bulb manufacturers were steadily improving their ability to mass produce light bulbs. When an excess of supply emerged, they met in Geneva to explore how they could avoid further driving down prices.

The group was formalized as Phœbus S.A. Compagnie Industrielle pour le Développement de l'Éclairage, with the intent of coordinating the international light bulb market. The key founding members included General Electric (USA, with international subsidiaries), Philips (Netherlands), and others from Germany, France, Hungary, and the UK. The meeting concluded quickly because preliminary negotiations and planning had taken place beforehand, aligning the key players before the official convention. Membership shares in the cartel’s governing body reflected each company’s global market share. The cartel later involved additional manufacturers as it expanded its collaborative reach.

What they did: They standardized the life of a light bulb at 1,000 hours, reducing it 60% from the then current 2,500 hours. This decision introduced deliberate product obsolescence and drove sales volume. We learned about the cartel’s actions from the careful minutes they maintained, which eventually became public via government investigations and antitrust trials.

The cartel's minutes revealed that it:

• required members to submit bulbs for regular longevity testing

• fined members whose bulbs exceeded the 1,000-hour limit

In return, the cartel assigned exclusive territories by region and set sales quotas for each member.

While some regulators and independent engineers noticed the sudden drop in lightbulb life and rising prices, the cartel members portrayed their actions as industry “standardization” for quality and brightness, hiding their anti-competitive behavior. [Digital Commons] During the depression, the cartel argued that standardization stabilized employment, enabling companies to portray their actions as good business practice rather than criminal conspiracy. [University of Auckland]

Academics and journalists cite this cartel as a foundational case of corporate disregard for societal good in favor of private gain. It also illustrates big business’ propensity to lie and dissemble, providing justification for the ordinary person to be skeptical of any corporate communications that pertain to a company’s actions or intentions.

Harm Caused: The cartel’s actions affected millions of consumers for decades, forcing them to buy light bulbs more frequently and at artificially high prices. This cases illustrates how monopolization causes what economists consider a "deadweight loss” in market efficiency, which translates directly into a reduction of public welfare. Cultural theorists consider the creation of the cartel as the birth of a "throw-away consumer society" that reinforced perpetual demand cycles rather than environmental sustainability.

Outcome: For over a decade, regulators failed to intervene. Eventually, the outbreak of World War II made international coordination between the member firms impossible, and the cartel collapsed. Only after the war did the justice department bring suit against General Electric, with a 1949 court finally providing public documentation of the the cartel’s existence.