The European Commission has approved Nokia's$2.3 billion acquisition of US-based Infinera, confirming the deal raises no competition concerns.

The approval was granted unconditionally, as the combined company will hold only a moderate share of the optical transport equipment market.

Nokia's takeover of Infinera, announced last June, will make it the second-largest player in optical networking with a 20% market share, trailing Huawei.

Western firms have struggled to compete in China, giving Huawei a dominant position in the sector.

The acquisition is expected to boost Nokia's ability to sell networking equipment to major tech firms such as Amazon, Alphabet, and Microsoft. These companies are expanding their data centre infrastructure to support the growing demand for AI services.