Broad empirical evidence illustrates increasing market concentration since the 90s. Previous literature has highlighted the prominent role of technology, increasing barriers to entry, lax or ineffective antitrust enforcement. A similar upward trend (at least for some years during that time span) can be shown for aggressive corporate tax avoidance and profit shifting. Furthermore a link between competition policy and tax avoidance is also illustrated by the 2016 ruling of the European Commission which found the Irish government distorted competition policy by giving Apple significant tax breaks. The European Commission took decisions against Luxembourg (for unlawful tax benefits presented to Fiat and Amazon) and the Netherlands (for illegal tax breaks given to Starbucks). Tax-avoiding multinational enterprises (MNE) presumably benefit from the lower tax burden in that they gain market shares by reducing prices or increasing product quality and ultimately increasing price-cost mark-up rates. Despite the broad evidence on profit shifting behavior of multinational firms, there is so far little evidence on its association with market concentration. Within the scarce literature on this topic, the direction of causality as well as the sign of the relationship seems to be unclear. In view of this mixed evidence, the aim of this project is to provide new insights into the question whether tax avoidance translates into competitive advantages and in particular whether this amplifies the growth of so called “super star firms”. We want to find out to what extent changes in profit shifting potential translate to higher or lower markups and to what extent the results differ according to the degree of technology usage.