In this paper, the role of co-operative agreements in R&D, as a strategic option for firms confronted with the globalization of markets and the multiplication of sources of new technology is examined within the European context. It is argued that a plausible case can be made for co-operative R&D ventures, especially where positive and large technological spillovers exist, when the fixed component of technology-development cost is high and the hedging of risk is an important incentive, and when participating firms produce complementary products. The empirical evidence of a significant multiplication of R&D partnerships in Europe illustrates, from this perspective, the strategic option that firms were confronted with as competition ‘Europeanized’ and ‘globalized’ and technology changed rapidly and unpredictably. Co-operative agreements in R&D also create problems. One such problem is that the agreements could be a vehicle for reducing competition in the downstream product market and for creating barriers to entry. From that point of view, existing EC regulations seems well adapted, but this leaves open the question of conflicts between differing competition policies at the world level. The growing web of international coalitions makes it increasingly difficult, if not impossible, to implement a European technology policy whose results are not accessible to companies and countries competing with Europe.