The European Commission concluded that the 2.9-billion-euro (4.3-billion-dollar) takeover of Tele Atlas, a leading Dutch maker of digital maps, by TomTom, which makes portable navigation devices, "would not significantly impede effective competition.
"The satnav (satellite navigation) market is important for consumers. After thorough investigation, I am now satisfied that the innovation and competition we have seen in satnavs until now will continue after this merger and that consumers will continue to benefit from new and innovative products," said EU Competition Commissioner Neelie Kroes.
However the European Commission's investigations into the satnav and mapping sectors, increasingly used by car drivers throughout Europe, are not over.
In March, it launched a separate detailed antitrust probe of Finnish telecommunication equipment giant Nokia's takeover of US digital navigation group Navteq.
The EU executive arm's initial investigations indicated that this proposed merger "raises serious doubts with regards to vertical competition concerns," it said in a statement after a first review of the deal.
Europe's top antitrust watchdog said it would rule by August 8 whether to block the the proposed takeover worth 8.1 billion dollars or let it go ahead.
