The Commission claimed that the Volkswagen Act 1960 provisions on golden shares violated free movement of capital under the Treaty on the Functioning of the European Union article 63.

Germany argued that the 1960 law was based on a private agreement between workers, trade unions and the state, and so was not within the free movement of capital provisions under TFEU article 63, which did not have horizontal direct effect.

51 By capping voting rights at the same level of 20%, Paragraph 2(1) of the VW Law supplements a legal framework which enables the Federal and State authorities to exercise considerable influence on the basis of such a reduced investment.

53 This finding cannot be undermined by the argument advanced by the Federal Republic of Germany to the effect that Volkswagen’s shares are among the most highly-traded in Europe and that a large number of them are in the hands of investors from other Member States.

67 For the same reasons as those set out in paragraphs 53 to 55 of this judgment, this finding cannot be undermined by the Federal Republic of Germany’s argument that there is a keen investment interest in Volkswagen shares on the international financial markets.

[...] 70 In the alternative, the Federal Republic of Germany submits that the provisions of the VW Law criticised by the Commission are justified by overriding reasons in the general interest.

That Law, which is part of a particular historical context, established an ‘equitable balance of powers’ in order to take into account the interests of Volkswagen’s employees and to protect its minority shareholders.