Purpose
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 of planned obsolescence.[7] Regulators in the UK and some independent engineers have noted that there are benefits to shorter bulb lifespans, as shorter-life bulbs can be brighter for the same wattage.[8][9] Nevertheless, both internal comments from cartel executives[6] and later findings by a US court[10] suggest that the cartel's direct motivation for the change 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 of Swiss francs paid 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 1949, the United States District Court for the District of New Jersey found General Electric to have violated the Sherman 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]
In 1951, the Monopolies and Restrictive Practices Commission in the United Kingdom issued a report to Parliament, 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", and representatives of lightbulb manufacturers "had told us that in evidence that they regard the 1,000 hours as the best possible compromise at the present time, nor has any evidence been offered to us to the contrary" with the commission stating that they "must dismiss as misconceived" the allegation of planned obsolescence.[8]
