The campaign compares Holocaust victims to animals slaughtered for the food industry.
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It was banned by the Federal Court, which prompted PETA to appeal to the European Court of Human Rights in Strasbourg, claiming it was a violation of their right of freedom of speech.
The controversial posters in question showed side-by-side images, including piles of human bodies in concentration camps next to piles of slaughtered cows, stating "When it comes to animals, all people are Nazis."
The European Court of Human Rights ruled Thursday that given its history, Germany was justified in banning the PETA campaign.
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