The European Commission launched an infringement probe into Hungary's higher education law that critics say was aimed at shutting down the Soros-founded Central European University (CEU).
The EU executive said the law "is not compatible with the fundamental internal market freedoms", mainly infringing the freedom of services and establishement.
Hungary has one month to answer the Commission's concerns.
"Recent developments in Hungary have got many people worried in the EU ...
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Eszter Zalan is a Hungarian journalist who worked for Brussels-based news portal EUobserver specialising in European politics, focusing on populism and Brexit.