Overbooking is standard commercial practice across the airline industry. Carriers routinely sell 5% to 15% more tickets than there are physical seats on an aircraft, counting on statistical 'no-shows'. But when all passengers arrive at the gate, someone gets bumped.
Under Article 4 of EU Regulation 261/2004, airlines must first call for volunteers to surrender their seats in exchange for agreed benefits. If not enough volunteers step forward and the airline denies you boarding against your will (involuntary denied boarding), you are entitled to immediate statutory financial compensation.
Unlike delays where airlines frequently contest weather or technical conditions, involuntary denied boarding has virtually NO 'extraordinary circumstances' defense. The airline must pay you 250€, 400€, or 600€ in compensation on the spot, or via electronic bank transfer immediately.
In addition to cash compensation, the airline must also provide you with the choice between an immediate rerouting to your destination at the earliest opportunity (including meals and hotel while waiting) or a full refund of your ticket.