Designation of covered undertakings

1. An undertaking shall be designated as a covered undertaking where:
(a) it provides automated cognitive services, or goods or services whose production depends to a significant extent on automated cognitive systems, in the internal market;
(b) the economic output of the undertaking is substantially decoupled from its employment of labour; and
(c) the position referred to in points (a) and (b) is durable.

2. An undertaking shall be presumed to satisfy:
(a) point (a) of paragraph 1, where it achieves an annual Union turnover equal to or above EUR 7,5 billion, or where its fair market value amounts to at least EUR 75 billion, and it provides the goods or services referred to in that point in at least three Member States;
(b) point (b) of paragraph 1, where its annual worldwide turnover from the provision of the goods and services referred to in point (a) of paragraph 1, divided by the number of full-time equivalents engaged in that provision, each calculated in accordance with Annex I, equals or exceeds EUR 5 million;
(c) point (c) of paragraph 1, where the thresholds in points (a) and (b) of this paragraph were met in each of the last two financial years.

3. Where an undertaking meets all the thresholds laid down in paragraph 2, it shall notify the Commission thereof within two months after those thresholds are met, providing the information listed in Annex I. A failure to notify shall not prevent designation on the basis of the facts available to the Commission.

4. The Commission shall, without undue delay and at the latest 45 working days after receiving the complete information referred to in paragraph 3, designate by decision the undertaking as a covered undertaking.

5. The undertaking may, with its notification, present sufficiently substantiated arguments demonstrating that, exceptionally, although it meets all the thresholds in paragraph 2, it does not satisfy the requirements of paragraph 1. Those arguments shall be taken into account only where they manifestly call the presumption into question; arguments based on the definition of the relevant market shall not be taken into account. Where such arguments require detailed assessment, the Commission may open a market investigation pursuant to Article 4(1) instead of designating within the period laid down in paragraph 4.

6. The Commission may designate as a covered undertaking any undertaking that satisfies the requirements of paragraph 1 without meeting the thresholds of paragraph 2, following a market investigation conducted pursuant to Article 4.

7. The obligations laid down in this Regulation shall apply to a covered undertaking irrespective of whether its shares are admitted to trading, and designation shall precede any liquidity event wherever the thresholds of paragraph 2 are met before that event.

8. An undertaking shall not segment, divide, combine or restructure its activities, or acquire or dispose of undertakings, where the main purpose or one of the main effects thereof is to avoid meeting the thresholds laid down in paragraph 2. The Commission shall disregard any such arrangement when applying this Regulation, and shall likewise disregard any attribution of consideration the main purpose or one of the main effects of which is to reduce the turnover referred to in point (b) of paragraph 2.

9. The Commission is empowered to adopt delegated acts in accordance with Article 15 to amend the methodology laid down in Annex I where necessary to reflect technological and market developments. Those delegated acts shall not amend the thresholds laid down in paragraph 2.