Antitrust regulators at the U.S. Department of Justice on Thursday cleared Oracle Corp.'s (ORCL) $7.4 billion deal to buy Sun Microsystems Inc. (JAVA), removing a major hurdle for the transaction.

Oracle, which makes databases and other software for large corporations, has said it hopes to close the deal this summer, which now depends on the approval of European antitrust regulators. The European Commission must decide by Sept. 3 whether to clear the acquisition or launch a detailed investigation.

Sun's shareholders approved the deal last month.

Oracle, based in Redwood City, Calif.,has said its acquisition of Sun, which makes computer servers and owns the widely used Java technology platform, would transform the information-technology industry.

The Justice Department's approval is an encouraging sign for Oracle as it awaits approval from the E.U., said Pacific Crest analyst Brendan Barnicle.

"The E.U. and the DOJ don't always see eye to eye, but they aren't usually that far apart," he said.

Europe's antitrust regulator identified three possible problem areas with the deal, a person familiar with the matter told Dow Jones Newswires earlier this month.

The European Commission has sent a questionnaire to other software competitors concentrating on three potential areas of concern: the Java software language made by Sun; software that glues separate programs together, known as "middleware"; and database software, the person said. The questionnaire seeks to establish whether a merger would lead to higher prices or fewer choices in those product areas. Companies were required to respond by Aug. 13.

Oracle hasn't previously had a significant presence in the hardware business, and it called Sun's Java the most important software it has ever acquired.

Java is one of the key software building blocks used in Internet programming and MySQL, an open source database program.

On Monday, Bjorn Schotte, an executive at German software developer Mayflower GmbH, wrote in an online posting that he had received a letter from the European Commission inquiring about contact information for companies "that work with MySQL and open source products" who might be able to assist in its investigation.

Commission staff had also asked Schotte in a questionnaire about the quality of InnoDB database software since its developer, Finland-based Innobase OY, was acquired by Oracle nearly four years ago, he wrote.

The Oracle-Sun deal, which came as something of a surprise when it was announced in April, materialized after acquisition talks between International Business Machines Corp. (IBM) and Santa Clara, Calif.-based Sun failed.

The Justice Department's clearance comes after it extended its antitrust review of the deal back in June. An antitrust lawyer for Oracle said the department needed additional time to review one issue about the way rights to Java are licensed.

Oracle declined to comment beyond a statement confirming the Justice Department's clearance. A Sun spokesperson was not immediately available for comment.

Justice Department spokeswoman Gina Talamona confirmed the department closed its antitrust review and took no enforcement action, but had no further comment.

Oracle shares were up slightly to $21.96 in after-hours trading. The stock rose 16 cents, or 0.7%, Thursday.

-By Brent Kendall and Jerry A. DiColo, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

(Dan Gallagher contributed to this report.)