DOJ Withdraws Antitrust Guidance For Proxy Advisory Industry

The U.S. Department of Justice Antitrust Division ("DOJ") has withdrawn a nearly 40-year-old business review letter ("BRL") issued to Institutional Shareholder Services ("ISS"), signaling heightened antitrust scrutiny of the proxy advisory industry.

The DOJ has withdrawn the 1987 BRL issued to ISS, the largest U.S. proxy advisor. The withdrawal follows state-level efforts to regulate the proxy advisory industry, a November 2025 antitrust lawsuit by the Florida Attorney General, and President Trump's December 2025 executive order on proxy advisory firms.

At least thirteen states have proposed or enacted legislation imposing disclosure requirements or other obligations on proxy advisory firms, and others are advancing similar bills. The Florida lawsuit alleges that ISS and Glass Lewis, the largest competitor of ISS, violated Florida's antitrust and consumer protection laws by coordinating offerings that incorporated environmental, social, and governance ("ESG") and diversity, equity, and inclusion ("DEI") factors in voting recommendations. The executive order characterizes ISS and Glass Lewis as wielding "substantial power" to advance "politically-motivated agendas," including ESG and DEI. The order furthermore directs the Federal Trade Commission and DOJ to review state antitrust investigations into whether ISS and Glass Lewis have violated federal antitrust laws.

Under federal regulations, a BRL reflects the DOJ's assessment of a proposed business practice under the antitrust laws and its current enforcement intentions. Any person may request one. Although a BRL confers no immunity, and the DOJ may revisit its position at any time, the review provides some assurance about a practice's legality under the antitrust laws.

The 1987 BRL related to the practice by ISS of "offering advice relating to the exercise of voting rights on issues of corporate governance." The DOJ grounded the BRL in the limited scope of ISS's services in a then-nascent industry and in ISS's representation that it would not "provide advice or engage in discussions with respect to the corporate operations or business activities" of the companies it covered.

In withdrawing the BRL, the DOJ noted that proxy advising is not inherently an antitrust violation and that exercising voting rights on a proxy advisor's recommendation "does not raise antitrust concerns." Rather, the DOJ withdrew the BRL because the combined market share of ISS and Glass Lewis (exceeding 90%) permits them to wield "tremendous influence" over corporate governance at U.S. public companies. The DOJ also stated that ISS's services and practices have evolved since the BRL was issued: ISS now advises on corporate operations and provides consulting services.

Although withdrawal of the BRL does not establish that ISS has violated the antitrust laws, it may accelerate federal and state oversight of the proxy advisory industry. This heightened scrutiny may prompt proxy advisors to change their practices and ultimately to reduce their influence over shareholder voting at public companies.