U.S. DOJ Plans to Revoke Antitrust Exemption Letters for Proxy Advisors
Alina Collins
The U.S. Department of Justice plans to revoke a 1987 letter that shielded proxy-advisory giant ISS from antitrust scrutiny — This means → a nearly four-decade-old legal safe harbor may vanish, exposing the institutional-voting advisory market to enforcement risk.
What is this "exemption letter"?
In 1987 the DOJ sent a letter to Institutional Shareholder Services (ISS) — a firm that tells large funds how to vote on corporate proposals — confirming its business model raised no antitrust concerns.
In plain terms = the government stamped the business "legal — no monopoly problem here."
Armed with that letter, ISS operated for nearly 40 years, and together with Glass Lewis came to dominate the proxy-advisory market.
Why revoke it now?
A DOJ official told Reuters the reason is straightforward: industry consolidation now raises significant antitrust concerns — the market went from multiple competitors to a two-firm duopoly.
This means → the DOJ considers its 1987 judgment outdated: what was "not a monopoly problem" then no longer holds in today's market structure.
President Trump had already called for an antitrust investigation into the proxy-advisory industry, singling out ISS and Glass Lewis.
Who is driving the politics?
Conservative groups and Republican politicians have long criticized the two firms: they wield influence over vast pools of institutional capital, yet use that leverage to advance ESG-related shareholder proposals.
In plain terms = critics argue the firms should give neutral voting advice, not use their market power to champion a "green agenda."
Revoking the exemption letter aligns squarely with this political pressure — antitrust is being deployed as a policy lever.
What does this mean for markets?
Revoking the letter is not itself a lawsuit, but it removes a legal barrier — the DOJ can now freely open investigations or bring enforcement actions.
This means → the business models of ISS and Glass Lewis face formal antitrust scrutiny for the first time, with worst-case outcomes including forced divestitures or fee-structure changes.
As of the report, ISS declined to comment. The key question going forward: will the DOJ follow up with an actual investigation, or stop at the political gesture of pulling the letter?
Content is for reference only, not financial advice.