After a 10-month stand-off with European regulators, software giant Oracle Corporation finally won unconditional approval today for its $7.4-billion acquisition of computer maker Sun Microsystems.

''I am now satisfied that competition and innovation will be preserved in all the markets concerned,'' European Competition Commissioner (EC) Neelie Kroes said in a statement in Brussels. ''Oracle's acquisition of Sun has the potential to revitalize important assets and create new and innovative products.''

Oracle, the second-biggest software maker after Microsoft, won unconditional approval after it pledged to address the regulator's concerns on the maintenance of MySQL last month. (See: Oracle pledge may break Sun Microsystems logjam at EC)

Threatening to derail one of the biggest tech deals of last year, the European Union's Brussels-based antitrust watchdog, the EC had issued a statement of objections on 10 November 2009, drawing criticism not only from Oracle but also US regulators. (See: EU regulator lists objections to Oracle-Sun merger)

The US Department of Justice had approved the acquisition in August, although it had extended its review of the deal to seek more information since it was concerned about Sun's licensing of Java, the programming language that runs on more than seven billion electronic devices globally including mobile phones and PCs.

Redwood City, California-based Oracle, seeking to strengthen its position against its bigger rival IBM, stepped in to acquire Sun Microsystems for $7.4 billion in April after IBM's attempt to buy the beleaguered server and hardware maker fell apart. (See: Oracle trumps IBM, acquires Sun Microsystems for $7.4 billion) 

The EC, led by Neelie Kroes, who is known to take a tough stance on market dominance and anti-competition activities, had said that it would look closely at Sun's Java networking software franchise and database software.

In November the EC issued a formal charge sheet spelling out its concerns on the merger on the grounds that the combination of Sun's open source MySQL database product with Oracle's enterprise database products could have potential negative effects on competition in the market for database products. (See: EU regulator lists objections to Oracle-Sun merger)

Although regulators in the US had questioned Oracle's market power in some areas of its business, they raised fewer concerns than the Europeans about open-source software.

The Commission's preliminary market investigation had shown that the Oracle databases and Sun's MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional.

Sun had started losing market share to rivals as its sales plummet, amid uncertainty about Oracle's long-term plans for the company.

In a November speech in Silicon Valley, Oracle's chief executive Larry Ellison said that Sun was losing around $100 million a month since rivals like International Business Machines and Hewlett-Packard were picking up Sun's customers, who seemed uncertain about the company's future.

But with Sun losing around $100 million a month as recession impacted enterprises put off decisions on buying Sun's large computers, Oracle felt it had no choice but to make some concessions to the EC and address its concerns in a 10-point pledge on the maintenance of MySQL last month.

The $17 billion database market is ruled by three proprietary database vendors, Oracle, IBM and Microsoft, which collectively have a 85-per cent market share in terms of revenue.