Sony and Philips won permission from the European Commission on Monday to purchase InterTrust Technologies, which holds patents for techniques used to protect easy-to-copy digital material. The $453 million deal is considered pro-competitive by some analysts, because it may put the venture in a position to challenge Microsoft's position in the area.
"On the basis of the parties' position in the markets investigated and considering that strong competitors are active in these markets, the Commission concluded that the transaction raises no serious competition concerns," the Commission said in a statement.
It also said that markets for digital rights management were nascent as the technology was still developing.
InterTrust, based in Santa Clara, in the heart of California's Silicon Valley, holds 26 U.S. patents for a mix of software and hardware techniques used to protect digital material from unauthorized duplication by business rivals, fans or criminal pirates.
The company has struggled because of a slow uptake of digital sales, but its sale to two well-capitalized firms could help it become a force in the industry.
The acquisition also takes aim at Macrovision, the dominant supplier of copy protection for feature films worldwide.
When the deal was announced in November, Philips and Sony, the electronics giants who introduced the CD format 20 years ago, said that it would enable secure distribution of content as more films and music are sold over the Internet and other media in digital format.