DOJ Withdraws Longstanding Business Review Letter Issued to Institutional Shareholder Services

On August 5, 2026, “DOJ announced the withdrawal of a 1987 Business Review Letter (the “1987 BRL” or the “Letter”) previously issued to Institutional Shareholder Services (“ISS”), a proxy advisory firm.  Justice Department Withdraws Business Review Letter Issued to Proxy Advisory Firm, DOJ Antitrust Division, Press Release No. 26-886 (Aug. 5, 2026). The DOJ indicated that the withdrawal may signal future antitrust scrutiny of ISS and the proxy advisory industry, noting that a business review letter “states only the enforcement intention of the Antitrust Division as of the date of the letter, and the Division remains completely free to bring whatever action or proceeding it subsequently comes to believe is required by the public interest.”

According to the DOJ, when the DOJ issued the 1987 BRL, “proxy advising as an industry was in its infancy.” At the time, the DOJ had “no current intention to bring action under the antitrust laws to enjoin the establishment and operation of ISS,” based on ISS’s representation that it “will offer advice only on matters relating to the exercise of voting rights on issues of corporate governance” and would “not provide advice or engage in discussions with respect to the corporate operations or business activities.” The DOJ now claims that ISS’s business model has since changed by offering corporate consulting services in connection with its proxy voting services, which the DOJ contends is “in direct conflict with the language in the Letter” and outside the scope of the 1987 BRL. While the DOJ does not define the alleged proxy advisory sector in its press release, the DOJ has characterized it as highly concentrated with ISS and Glass Lewis, & Co. LLC allegedly controlling more than 90% of the market, raising “significant competition concerns.” This action withdraws decades-old guidance because the Letter allegedly no longer reflects ISS’s current business practices or the Division’s current view of those practices.  This development was also previewed in 2020 when the Antitrust Division raised similar alleged competitive concerns regarding the proxy advisory industry during SEC rulemaking on proxy voting advice. The Antitrust Division alleged that it had been made aware of concerns regarding the state of competition in the proxy advisory services, including economies of scale that posed barriers to new entry and minimized switching to in-house advisory services.  The recission also follows a December 2025 Executive Order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors,” in which the Trump administration directed multiple federal agencies including the SEC, FTC, and DOL to further investigate the industry.

When receiving a business review letter issued by the DOJ, it is important to remember that a BRL offers only limited and time-bound security: it reflects the DOJ’s enforcement intentions as of the date of the letter and may be withdrawn if a company’s business practices evolve beyond the conduct originally described. In light of this announcement, reviewing any existing business review letters to confirm that current operations remain within the scope of the conduct described in the BRL can be used to proactively identify any potential enforcement risks. The DOJ has indicated that market concentration in the proxy advisory sector, and firms’ expansion into adjacent services (such as corporate consulting), may draw antitrust scrutiny. If a review of business operations reveals that significant changes have been made into new or adjacent lines of business, such expansions should be reassessed in conjunction with the changes in the competitive landscape within a given industry to make sure that prior representations made to the DOJ remain factually accurate.