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EU: Court of Justice backs German law to protect Volkswagen

 |  October 22, 2013

The EU’s highest court backed German legislation Tuesday meant to protect auto giant Volkswagen from “hostile takeovers” but earned backlash from the European Commission.

The EU Court of Justice ruled in favor of the German law, finding that it did not breach EU competition rules. The legislation was established in 1960 when Volkswagen, Europe’s largest car manufacturer, went public and set aside 20-percent stakes of the company for the federal government and VW’s geographical headquarters, Lower Saxony.

The Commission ruled in 2007, however, that Germany must abolish parts of the law. The government therefore abolished provisions that included board seats for government regulators as well as a 20 percent voting limit for shareholders.

The Commission reportedly wanted Germany to also abolish the provision that set aside 20 percent of the company for Lower Saxony and, following Germany’s refusal to do so, sued the government in the ECJ.

The Court of Justice sided with Germany on Tuesday, it said in a statement.

Full content: Economic Times of India

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