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

The Daily Telegraph - Business - - Front Page - By Olivia Rudgard in San Fran­cisco

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

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