It says they "compete with each other only to a limited extent".
The European Commission said it saw no competition problems with Fox's bid to buy the rest of Sky that it doesn't already own, according to an emailed statement on Friday. Sky is the owner of Sky News, the global news company based in the United Kingdom, that is also available to USA audiences through Apple TV, Roku and other devices.
Rivals have lodged submissions with the regulator, raising concerns that the combined broadcasters would dominate bidding for top-flight sport, TV shows and movies.
In December the USA movie and TV giant, which owns 39% of Sky, announced its ambition to buy the rest of the pay-TV giant and fold it into its own operations.
"The Commission found that 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 in the relevant Member States", the European Commission said in a press release.
"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", Fox said.
The European commission, which has been investigating 21st Century Fox's takeover bid since early March, has given the deal "unconditional approval".
Today's announcement is an important step and gives an indication of what will be laid out in a broader final report the EC will issue and handed to the Competition and Markets Authority (CMA).
British regulators are still examining whether the deal would result in Murdoch controlling too much of Britain's media, and whether Fox would be committed to upholding broadcasting standards.