Oracle's proposed $7 billion takeover of Sun Microsystems has been thrown into doubt after the European Commission (EC) objected to the deal going ahead.

Officials at the EC have told the US Securities and Exchange Commission that the merger would be damaging to competition in the database market.

But American government regulators have reaffirmed their support for the deal.

Molly Boast, deputy assistant attorney general, said that a Department of Justice investigation had concluded that the merger was unlikely to be anti-competitive.

"At this point in its process, it appears that the EC holds a different view," she admitted.

"We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission's jurisdiction."

As part of its tough financial stance, the EC is also set to ask Britain to cut its budget deficit by around $42 billion a year up until 2015, reports the Independent.

By Claire Archer

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