Out of the shadows Facebook admits to ‘neutralising’ rivals
US politicians accuse the big tech chiefs of abusing their market dominance and crushing competitors Ineos’ heir apparent? First George Ratcliffe must clean up with his venture making hand sanitiser
FACEBOOK bought Instagram to “neutralise” the rival app’s threat, it emerged yesterday as US politicians rounded on Silicon Valley’s tech chiefs in an unprecedented public interrogation.
US Congressmen grilled the chief executives of Amazon, Apple, Facebook and Google in a politically-charged and combative session that moved far beyond the scope of alleged anti-competitive practices.
Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai were accused of dominating markets, crushing smaller competitors and unfairly exploiting user data to enrich themselves, as well using their power to silence Right-wing voices and undermine democracy.
Internal documents obtained by the House Subcommittee on Antitrust showed Mr Zuckerberg arguing to employees that Facebook should buy Instagram because “they could be disruptive to us” ahead of his $1bn (£770m) acquisition in 2012.
In the emails, sent to then-chief financial officer, David Ebersman, he also suggested that buying it could help Facebook corner the market early, pre-empting any new competitors which might spring up later.
“You purchased Instagram to neutralise a competitive threat,” said Jerrold Nadler, a Democratic member of the committee.
“If this was an illegal merger at the time of the transaction, why shouldn’t Instagram now be broken off into a separate company?” he said.
The hearing, which comes as the four companies face multiple US investigations that could see them broken up or their power curbed, heard that the Covid-19 pandemic was entrenching big companies’ power at the expense of “mom and pop” businesses.
David Cicilline, the committee’s chairman, said: “Our founders would not bow before a king, nor should we bow before the emperors of the online economy,” he said.
Republican Jim Jordan said big tech was “out to get” conservatives, citing Twitter’s decisions to add fact-checks and labels hiding President Trump’s tweets and Google-owned YouTube’s decision to remove content that conflicts with the advice of the World Health Organisation, which he said “shills for China”.
His fellow Republican Matt Gaetz accused Google of “following China’s corporate espionage playbook” criticising the company’s decision to back out of US military contracts and citing accusations from the Pentagon that the company’s work was aiding the Chinese military.
In response, Mr Pichai said that his company had a “very limited presence” in China. Documents obtained by the committee also allegedly showed that Google staff changed how its search engine worked due to fears that other websites were diverting traffic and revenue from its services a decade ago.
“Google’s memos observed that certain websites were getting, and I quote, ‘too much traffic’. So Google decided to put an end to that,” Mr Cicilline said, adding that the committee’s investigation also showed the company threatened to remove competitor Yelp from its search engine after it objected to its restaurant reviews being taken to bolster Google’s own review section.
In response to the accusations, the executives pointed to competition from smaller companies and argued that they helped, rather than harmed, smaller competitors by connecting them with consumers.
“When I run the company, I’m really focused on giving users what they want. We conduct ourselves to the highest standard,” Mr Pichai said, adding that his company saw “vigorous” competition from e-commerce companies. Mr Zuckerberg said he had “always been clear that we viewed Instagram both as a competitor, and as a complement to our services”.
Mr Pichai, Mr Zuckerberg and Mr Bezos bore the brunt of the hearing, with Mr Cook facing fewer questions.
‘When I learnt to drive, he’d send me to the chip shop with £20 to buy the family dinner. He always expected the 50p change’
‘Would you be here if I wasn’t his son?” asks George Ratcliffe, the 31-year-old middle child of Sir Jim Ratcliffe, one of Britain’s richest men worth an estimated £12bn.
The answer, probably, is no. But then that’s the curse of children of the rich and powerful, proving that they are where they are on merit, not because of nepotism. George has his chance to do that now.
In 2013 he joined Ineos, the chemicals business his father founded and propelled to become the world’s second-biggest in its field, as a graduate trainee after studying economics at Bath University.
Less than a decade later and he’s just been made chief operating officer of Ineos’s hygienics business, charged with making a long-term commercial success of the operation the company launched to make hand sanitiser when the pandemic was at its height in March.
Making hand sanitiser was a crash project, on the decision of Ratcliffe senior, who wanted to give it to the NHS for free.
“He was the one who said ‘I saw China build a hospital in 10 days, we should be able to build a hand sanitiser factory in 10 days’,” says George, who at the time was running Ineos’s compounds business, where the first hygienics plant was built. “We actually did it in seven days, but gave ourselves a three-day buffer for testing.”
After what’s estimated to be a £20m initial investment, 4m bottles of Ineos hand sanitiser have been distributed worldwide, made from ethanol and isopropyl alcohol that the company’s chemical plants turn out.
In April it was decided Ineos should turn it into a consumer business. “We couldn’t keep on giving it away for free,” says George. “It’s a natural progression and we believe there’ll be a whole new way we treat hygiene in the future because of the pandemic. It’s a gap in the market.”
Ineos’s proposition is it can take on established players because not only has it already set up five factories producing hand sanitiser, it can do it cheaper as the company already makes the raw materials. Eventually the plan is to continue this vertical integration, with Ineos making its own bottles, too.
George now finds himself effectively chief executive of Ineos’s latest business, a 200-person and counting enterprise, as what he terms “the biggest company most people have never heard of ” continues its move into the consumer sector.
It already has a clothing line, Belstaff, and hopes to start selling its own 4x4 car, the Grenadier, in 2022. Building Ineos as a consumer brand is the biggest challenge George believes he faces.
There are some heavyweights on board to help get the name known, though. The product will be launched at this weekend’s British Grand Prix, with Ineos supporting the Mercedes AMG Petronas Formula 1 team.
This might be the biggest challenge of his career yet, but George says he’s faced other difficulties at the company. He joined Ineos as the business was involved in a bitter strike at the Grangemouth refinery, and had to cross picket lines at the Scottish plant every day for weeks. “The campaign was very much anti-Jim,” he says. “People at the site caught on pretty quickly to who I was. I think the worst of it was a tough sounding Scots bloke in the canteen, letting me know that he’d seen ‘that wee Ratcliffe boy’. It was intimidating but manageable.”
Four years later, at George’s leaving drinks, many of those on the picket line joined him to raise a glass.
Speaking to The Daily Telegraph is the first interview given by George, who has deliberately kept a low profile, with little trace of him online. Even his LinkedIn page only gives the barest of details, and does not include a photo.
He says he was not put under pressure to join in the family business, although “Jim made it clear he would love
having me as part of it”. He admits he had a less rigorous interview than other graduates, but since then has had to justify his position: “That’s one of my drives, to say I do need to work harder. To not be a playboy.”
Despite coming from one of the country’s wealthiest families. George says he was grounded in reality from an early age, something he says reflects his father’s council house upbringing.
“When I learnt to drive, he would send me to the fish and chip shop with £20 to buy dinner for the family,” he says. “When I got back he expected the 50p change.”
Ineos graduates are famously invited on expeditions to Africa, where they can look forward to the marathons and long cycle rides that Sir Jim enjoys. Five years ago George got to experience this – but as part of a family holiday.
“Every day for about two weeks in Namibia, we either cycled or ran – I think we covered 600km,” he says. As a youngster, running “was mandatory”, as George took part in the sport his father is passionate about. “You have to be 18 to run in London marathon, and as a present for
my 18th Jim said, ‘Congratulations, you’re running in the London marathon’ and handed me my entry,” he recalls.
He is coy about whether he will follow in his father’s footsteps at Ineos.
“There is no given that, when Jim retires that I’m there to fill in the shoes,” George says. “In a very honest way he’s made that very clear, and I think he wants to make that clear in Ineos, saying it’s a meritocracy.
“I’ve got a very unique situation in Ineos, and I feel I have to earn it and justify it.”
Still, Sir Jim is 67, and must be looking forward to stepping back from the business?
That’s the problem, says George. “Jim is Ineos and Ineos is Jim, he’s in the driving seat and is going to do that for so long. Because Ineos is private he doesn’t have to retire [at a set point]”.
But that could be an advantage for George, who says he’s “obviously got an idea” of what he wants to happen.
“It means there’s no firm date, it doesn’t mean I’ll have to prove my salt by the time I’m 40,” George adds. “I’ll keep on learning and if successful there’ll be a transition where I can take on more responsibility.”
Selling hand sanitiser into a market that might not be crying out for it in a year will certainly be one success.
Big tech chiefs faced an unprecedented grilling yesterday, clockwise from bottom left, Tim Cook, Apple; Mark Zuckerberg, Facebook; Sundar Pichai, Google and Jeff Bezos, Amazon
George Ratcliffe, son of Ineos boss, Sir Jim, is now heading its latest enterprise, which will be launched at the British Grand Prix, right, Lewis Hamilton, inset left