Justice Department Revokes ISS Business Review Letter - PracticalESG
In 1987, the Antitrust Division of the Justice Department issued a Business Review Letter to proxy advisor ISS. The letter clarified the Antitrust Division’s position that proxy advisory firms and ISS were. . .
In 1987, the Antitrust Division of the Justice Department issued a Business Review Letter to proxy advisor ISS. The letter clarified the Antitrust Division’s position that proxy advisory firms and ISS were not in violation of antitrust laws. Now the DOJ is withdrawing this letter. The Justice Department claims that its position on proxy advising has not changed but that ISS’s business practices have. The DOJ states in apress release:“‘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. ’ While the 1987 BRL stated the Division’s enforcement intention at that time, the Letter is not applicable to ISS’s current business practice of corporate consulting services. These issues were not a part of ISS’s original business model and are outside the scope of the 1987 BRL. Indeed, the representation at the time that ISS would not ‘provide or engage in discussions with respect to the corporate operations or business activities’ may run contrary to ISS’s business model today. ”The withdrawal of the Business Review Letter may constitute another intimidation tactic by the administration to rein in proxy advisors. Alternatively, it could be the first in a series of procedural moves ultimately resulting in federal antitrust litigation against ISS. This revocation may also be the Department of Justice seeking to appease Capitol Hill. Last month, congressional Republicanswrote to the DOJ and FTC, applauding their investigations into ISS and Glass Lewis and encouraging further legal action. We cannot divine the DOJ’s intentions; however, the Business Review Letter’s withdrawal indicates that the federal government’s fight with proxy advisors is far from over. Our members can learn more about ESG litigationhere. If you’re not already a member,sign up nowand take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member,you may cancel for any reason and receive a full refund. But it will probably pay for itself before then. Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over100 sustainability subject areas– updated daily with practical and credible information. Practical Guidance for Companies, Curated for Clarity. Back to all blogsThe EditorZachary Barlow is a licensed attorney. He earned his JD from the University of Mississippi and has a bachelor’s in Public Policy Leadership. He practiced law at a mid-size firm and handled a wide variety of cases. During this time he assisted in overseeing compliance of a public entity and litigated contract disputes, gaining experience both in and outside of the courtroom. Zachary currently assists the PracticalESG. com editorial team by providing research and creating content on a spectrum of ESG…View Profile