The acquisition does "not raise any competition concerns, in particular because there are only modest overlaps between" the two companies, the Commission said in a statement.
(Also see: Microsoft to acquire Nokia's Devices & Services business in 5.44 billion euros deal)
The links that do exist between existing Microsoft activities and Nokia's smartphone devices "are unlikely to lead to competitors being shut out from the market," it said.
In smartphones and tablets, the two companies face "several strong rivals, such as Samsung and Apple (who) will continue to compete with the merged entity," it said.
Software giant Microsoft would also have little incentive to restrict use of its Windows operating system for other device makers or of its mobile apps, it said.
Once the world leader in mobile phones, Nokia lost its top place to South Korea's Samsung in 2012, especially as its rivals took the lead in the key smartphone market.
Microsoft has been rumoured to be working on a revamped Windows Phone 8.1, codenamed 'Blue', since long. Now new details of Windows Phone 8.1 have surfaced online that shed some light on some devices that will run the forthcoming operating system update as well as some of its new features.
Popular phone tipster, @evleaks has revealed that two Nokia smartphones, codenamed Goldfinger and Moneypenny, will be the first devices to run Windows Phone Blue. @evleaks' tweet reads, "Nokia Goldfinger and Moneypenny are shaping up to be the first Windows Phone Blue devices." It's worth pointing out that both code names are linked to the James Bond movies.
In addition, The Verge in a report reveals that out of the two Nokia phones, Goldfinger is the flagship device. Further, the report quotes sources familiar with Nokia's plans and notes that the Goldfinger will come with Nokia's '3D Touch' technology, which the company has been working on for long.
The report suggests that the rumoured '3D Touch' feature uses device's sensors to detect interactions that are off-the-glass. The Nokia Goldfinger is said to come hand gesture support which will let users navigate on a phone without touching the display, while other gestures under consideration include flipping and scrolling. However, the report does not mention anything about the gesture support in other Nokia devices that are already available in the market.
The report also speculates that Microsoft might reveal the Windows Phone 8.1 update at MWC 2014.
As of now, no other details of the alleged Nokia Goldfinger and Moneypenny have been revealed. It is not clear whether the two devices are smartphones or tablets.
Reports had suggested that Windows Phone 8.1 would come with large-screen support.
Earlier this week, a report claimed that Nokia would launch its next tablet dubbed Lumia 2020 alongside the Lumia 1820 smartphone, at MWC 2014.