This paper begins by undertaking, a theoretical analysis of EC industrial policy. This will involve selecting definitions and identifying policy instruments, and conclude by advancing an industrial policy model with which we may better comprehend contemporary EC industrial policy. Secondly, it is my aim to explore the relationship which exists between the European Commission and electronics transnational corporations (TNCS) in the creation and control of EC industrial policy. The objective is to understand and to provide a framework of analysis for the processes of Comrnission-TNC relations. This necessitates understanding how the various organisations interact and how they influence one another. This policy-making power interplay is best conceptualised in terms of the Pentagonal Diplomacy model. I acknowledge that other actors, especially national governments, are important players in EC industrial policy formulation. I argue however, that EC electronics policy is shaped and guided mainly by the Commission and a group of large firms. This process occurs through what Wilks & Wright describe as "informal relationships" [1987:2861, the effects of which are often underestimated in analyses of EC industrial policy. Thirdly, I advance the notion that the emergence and consolidation of an EC industrial policy has eroded national sovereignty and contributed to the closer union of Europe's nation states. The 1990 delineation of an explicit industrial policy for the European Union has implications which go beyond mere rhetoric. Member states are now obliged to consult each other and coordinate their actions in many spheres. This means that the industrial policy competence of the Union should also be understood as part of the integration process. That is, through the Maastricht Treaty, the coordination of economic and monetary policies has become central to the development of European integration. The coordination of industrial policies can be seen as a flanking dimension of this endeavour. Following on from the 1950s creation of a High Authority for coal and steel policy, competence has, since the early 1980's, shifted from the national to the European level in several other important economic sectors. This power shift signifies a weakening of national government policy autonomy, and a strengthening of supranational bodies, most notably the European Commission. It indicates an integration of decision-making power, as well as an irreversible fusing of national economic interests for core industrial sectors. I shall support these assertions with evidence from the electronics industry.