The European Commission has approved Toyota Motor Corp. and SoftBank Group Corp.'s plan to form an on-demand mobility service joint venture in Japan.

The commission ruled Dec. 13 that the new company, Monet Technologies Corp., would raise no competition concerns as it will be active in Japan and has no foreseen activities in the European market.

Both SoftBank and Toyota are making significant investments in the ride-hailing industry. SoftBank-led Vision Fund in March invested $2.25 billion in General Motors Co.'s self-driving unit GM Cruise Holdings LLC and has investments in California-based Uber Technologies Inc. and Singapore-based GrabTaxi Holdings Pte. Ltd. Toyota recently invested $1 billion in Grab.

The Japanese companies unveiled Monet in October, including the ownership structure of the JV. SoftBank will hold 50.25% of Monet, while Toyota will hold the remaining 49.75%.

Toyota and SoftBank plan to establish Monet before April 2019, and the company will be headquartered in Tokyo. By 2020, the companies are expected to launch an autonomous-mobility-as-a-service business using Toyota's battery electric vehicle e-Palette, which is in a concept stage.