The European Court of Justice has ruled that a German law from 1960 aiming to protect car manufacturer Volkswagen (VW) from hostile takeovers restricts the free movement of capital in the European Union. The "Volkswagen law" provides that: (i) no single shareholder can have more than 20 per cent of the voting rights in VW regardless of the actual level of their shareholding; and (ii) the Federal State and the region of Lower Saxony are each entitled to appoint two members to the firm's supervisory board. The law also allows the State or regional shareholder a blocking minority for certain important general assembly resolutions through an 80 per cent majority rule. Germany failed to demonstrate why these particular measures were necessary to protect the interests of workers, to maintain the interests of the minority shareholders or to preserve jobs generated by Volkswagen’s activity.