The European Commission on Thursday sent Hungary a formal letter of notice announcing its intent to open infringement proceedings against the government in Budapest for failing to comply with a number of EU media statutes.

Referring to the European Media Freedom Act (EMFA), the Commission said Hungary "fails to comply with requirements relating to the public service media," adding that it, "does not comply with provisions regarding interference in the work of journalists and media outlets in Hungary, restricting their economic activities and editorial freedom."

A statement on the Commission's website said, "Hungarian law does not offer an adequate protection of journalistic sources and confidential communications, nor effective judicial protection when these rights are breached."

Lack of transparency regarding media ownership, market concentration and the allocation of state advertising were also cited as problematic.

The Commission said "Hungary is also in breach of certain requirements relating to national media regulatory authorities" under the EU's Audiovisual Media Services Directive.

What happens next?

Budapest has two months to respond and address the concerns raised by the Commission. In the absence of a satisfactory response, the Commission may decide to issue a reasoned opinion.

Should that not be enough, the Commission could take the issue to the European Court of Justice (ECJ), which could impose fines on Budapest.

The European Media Freedom Act went into effect in August with the aim of protecting a free, independent and diverse EU media landscape.

Orban's grip on Hungarian media

Hungary has found itself at odds with the EU on a wide range of issues. But one particular area of contention has long been Prime Minister Victor Orban's grip on the media.

Much of Hungary's media market is consolidated in the hands of friends of Orban and his Fidesz party.

Orban, who has been in power since 2010 and proudly refers to his country's illiberal democracy, has wielded the media to his advantage during elections, as will be the case in the coming weeks.

With Hungary set to hold national parliamentary elections by April, Orban's sway over the media will come into focus once again.

He and Fidesz are facing their biggest challenge yet as Peter Magyar and the center-right Tisza party have begun to capitalize on a growing weariness of the government and its policies of late and managed to jump out to a lead in recent polling.

Edited by: Sean Sinico