"The proposed transaction would lead to only a limited increase in Sky's existing share of the markets for the acquisition of TV content as well as in the market for the wholesale supply of TV channels", it said.
The proposed transaction would merge Sky, a pay TV operator in European markets like Austria, Germany, Ireland, Italy and the United Kingdom, and 21st First Century Fox and its TV channels like Fox and National Geographic. Analysts have highlighted that the European Union would have allowed News Corp., which later split into News Corp and Fox, to take full control of Sky in 2011.
The European Commission said Friday that "the transaction would raise no competition concerns in Europe" and that Fox and Sky are mainly active in "different markets". On this, Fox said: "We now look forward to continuing to work with United Kingdom authorities and are confident that the proposed transaction will be approved following a thorough review process".
It is also present in Germany, Austria and Italy.
European Commission competition authorities have cleared 21st Century Fox to buy the 61% of broadcaster Sky that it does not yet own. Telco rivals expressed concerns that the company would dominate the bidding for televised entertainment and sport properties.
It will report back to the United Kingdom government by May 16, leaving a final decision on whether to block the deal with Culture Minister Karen Bradley.
However, the £18.5bn deal could still face regulatory obstacles in the United Kingdom, where Sky is based.
During the 2010 takeover bid by News Corp, which was derailed by the phone hacking scandal at the company, Murdoch reached an agreement with the government to spin off Sky News to satisfy media plurality concerns. Rupert's son James is chief exec of Fox and chairman of Sky.
"As the Commission's findings concern exclusively the competition aspects of the proposed transaction, today's clearance decision is without prejudice to the UK's ongoing media plurality review".