Bjarke Smith-Meyer, Joanna Plucinska:

According to a 12-page draft report obtained by POLITICO Pro, the European Commission wants to tax digital companies’ gross revenues at rates between 1 and 5 percent, based on where their users are located and how much advertising revenue they bring in.

If implemented, this move is bound to further ratchet up tensions between Europe and the United States.

From its aggressive enforcement of antitrust regulations, most prominently in recent years against Google, to its crackdown on Apple‘s use of Ireland as a tax haven, to its stringent approach on online privacy, Brussels is pushing to set the rules for the global digital economy — often to the dismay of Silicon Valley and Washington.