DOJ Drops 1987 ISS Shield: A Real Antitrust Warning for Wall Street's Duopoly

DOJ withdrawal removes ISS's old antitrust comfort letter

The DOJ has withdrawn a 1987 Business Review Letter that had quietly sat over ISS for nearly four decades. That matters because it was more than archival paperwork: it was a long-standing signal that the agency did not see antitrust trouble in ISS's operations at the time. The DOJ now says that old comfort no longer matches ISS's current practices, particularly because the firm also provides corporate consulting that can influence corporate operations.

That timing matters. The withdrawal comes after a White House executive order directed the SEC, FTC, and DOL to review existing regulatory frameworks and consider tighter oversight of proxy advisors. In other words, the policy backdrop has become less forgiving.

Why the market should care

The immediate issue is not ideology; it is uncertainty. ISS and Glass Lewis control more than 90% of the U.S. proxy advisory market, and the DOJ's action shows that concentration in that niche is back under scrutiny. For investors, the question is whether this antitrust move broadens into wider regulatory pressure that could change how much markets are willing to pay for a protected gatekeeper role.

Multiple agencies are now looking at the same proxy-advisor bottleneck

The withdrawn letter is the trigger, but the bigger story is the process now in motion.

The executive order put three regulators on the same path: the SEC, FTC, and DOL were directed to review existing frameworks. The DOJ's move matters because it suggests this is not a single-agency housekeeping act. It is a signal that the broader enforcement and policy apparatus is willing to revisit the assumptions that let proxy advisors operate with an old antitrust comfort letter, lighter SEC oversight, and growing fiduciary scrutiny.

1. SEC rules remain unsettled

The SEC did not simply reinforce the 2020 framework; it delivered the 2022 rescission of 2020 proxy-voting rules, arguing the changes would reduce burdens and protect the timeliness and independence of proxy advice. But that backdrop is still unsettled, with appeals court hearing underway on the legality of the earlier restrictions. For now, investors do not have a fully stable regulatory baseline.

2. DOL guidance expands fiduciary risk

The DOL now says proxy advisers commonly meet the test for investment-advice fiduciaries under ERISA. That matters because the reach extends beyond the advisors themselves to the asset managers and plan fiduciaries that rely on their recommendations. Once voting advice becomes a fiduciary issue, compliance costs, documentation, and liability exposure can all rise.

3. 2026 voting guidelines are already changing behavior

This is not just policy chatter. ISS and Glass Lewis already have 2026 ISS benchmark updates and 2026 Glass Lewis guidelines in place for this proxy season. Boards and institutional investors are making real decisions under those rules now, even as regulators reconsider the market's concentration and influence structure.

What investors should watch next

The core debate will keep turning on power versus process: reformers see a duopoly that needs more accountability, while critics worry oversight could politicize shareholder voting. For market positioning, though, the cleaner read is simpler.

When several regulators focus on the same bottleneck, the first thing to get repriced is not headline revenue. It is the premium attached to unstable gatekeeper power.