The European Commission today said that it is taking Germany to court for failing to change a law that gives special treatment to the carmaker Volkswagen.

This is the second time that the Commission has taken the German government to the European Court of Justice (ECJ) over the issue. The ECJ issued a judgment in October 2007 backing the Commission’s stance. 

The Commission today said that it would ask the ECJ to impose a fine of €31,111 a day on Germany, starting on the day of the 2007 judgment, until the government complies with the initial ruling. The Commission also wants to fine Germany €282,725 a day from the date of the next ECJ ruling until it complies with EU rules. 

In 2007, the ECJ found that a law dating from 1960, when Volkswagen was privatised, breaches EU rules on the free movement of capital because it grants special voting rights on Volkswagen’s board to the authorities in Lower Saxony (where Volkswagen is based). These rights give Volkswagen extra protection against hostile takeovers.

The Volkswagen law was amended in December 2008 but Lower Saxony retains a 20% blocking minority on the firm’s board.