When Hungary’s newly elected conservative Prime Minister Viktor Orbán enacted a new media law in 2010, the E.U. went up in arms denouncing its illiberal bias.

In July 2013 the European Union Parliament adopted a resolution stating that it was concerned that Hungary’s public service broadcasting was controlled by a centralized system that made decisions without public scrutiny.

However, just recently, and without fanfare, the Paris-based Reporters Without Borders released its 2016 “Press Freedom Index,” placing Hungary 67th on the world’s scale, well above Italy, which ranked 77th.

Similarly, when Poland in 2015 followed Hungary with its version of media reforms, the E.U. was equally vociferous. However, Poland ranks 47th on the “freedom index,” just below the U.S., which sits at 41st place.

Comparison with Italian press freedom is not limited to the Reporters’ index. Tóth Csaba, co-founder and director of strategy at the Budapest-based Republikon Institute, a liberal think tank, has been quoted as saying, “if there’s a comparison to be made, Hungary is probably closer to Italy under former Prime Minister Silvio Berlusconi than Vladimir Putin’s Russia.”

The situation in Poland is “very similar to what the Orbán government did,” said Tamás Bodoky, editor-in-chief of Atlatszo, an independent investigative website based in Budapest. Poland is heading down the Hungarian path: a state media which functions as a mouthpiece for the government and a neutered private media controlled by a small number of wealthy businessmen with ties to the ruling party.

In Poland, the concern is the impact of the state-run media on publications and broadcast stations owned by private companies, who could face commercial and political pressure to avoid criticizing the government, as they have in Hungary.

However, Maciej Kisilowski, Assistant Professor of Law and Public Management at Central European University in Budapest, explained “comparison between the two countries is overstated. Since the conservative Fidesz Party in coalition with Jobbik — a far-right party — got 66 percent of the votes in 2014, prime minister Orbán felt he had a strong mandate to limit press freedom. The Polish Law and Justice party, having won just 37.5 percent of the vote, by contrast, has less legitimacy, which might make them feel insecure and prone to heavy-handed actions aimed at cementing their power.”

Nonetheless, Polish president Andrzej Duda has signed controversial laws enabling the new conservative government to appoint the heads of public TV and radio, as well as civil service directors.

This in turn has led the European Commission to launch an inquiry into the allegedly anti-democratic stance of the Polish government. Recently, Frans Timmermans, first vice-president of the E.C., said that the media law “raises issues relating to freedom (of expression) and pluralism of the media.”

The European Broadcasting Union, which represents public broadcasters in Europe, has also been critical. “The haste with which this new law has been rushed through parliament strikes a discordant note about Poland and its respect for the rule of law and the democratic process,” EBU director general Ingrid Deltenre wrote in a letter to President Duda.

A controversy broke out last December when a number of journalists at TVP, Poland’s public TV channel, were fired by executives appointed by the Minister of Treasury. As a result of criticism, a new media law is in the works. “Now the responsibilities of the National Broadcasting Authority (NBA) — a constitutional body in charge of ensuring balanced information — will be altered,” explained Dorota Głowacka, a lawyer at the Helsinki Foundation for Human Rights. “NBA will continue to review media content and granting broadcast licenses, but it will not regulate public media.”

As for advertising, according to the Minister of Treasury more public advertising money was spent on private rather than public TV stations between 2007 and 2015.

However, “TVP received the vast majority of funds allocated to advertising. But, it is not clear under what criteria state-owned companies buy airtime, which may lead to an arbitrary selection of TV outlets,” Głowacka noted.

The main competitor of TVP, the American-owned TVN channel, is very critical of the government in its news coverage; however, no measure has yet been taken against TVN, possibly because of the NATO summit scheduled this July in Warsaw. But after President Obama leaves office it might not hesitate to levying some special taxes or denying public advertising funds to TVN.

Going back to Hungary, the new laws established a hierarchical media regulatory system under the control of an administrative body. All types of media are placed under a single regulatory system: the National Media and Infocommunications Authority, which has been criticized by European lawmakers and media analysts because of concerns over the independence of the Media Council, a five-member body within the Media Authority appointed for renewable nine-year terms.

Critics complain that the appointment system gives the government de facto control over the Media Council, and has enabled Hungary’s ruling Fidesz party to use its majority in Parliament to appoint party loyalists to all five Media Council seats. The Hungarian Government claims the Media Council is a democratically elected body in keeping with European principles, and that media authorities with a much smaller degree of independence from [the] government are not uncommon in Europe.

Hungary’s new media laws have made changes to the country’s public service media system. Each of Hungary’s public service media outlets — six TV networks, nine radio stations and one national news service — are now supervised by a single body headed by a chairperson appointed by the Media Council. The assets of these outlets have been transferred to a newly established public media fund, which is managed by the Media Council. News content for all public media stations is produced centrally by Hungary’s national news service, MTI, which is headed by a director nominated by the Media Council chairperson.

Opponents claim the measures have eliminated the independence of Hungary’s public service media, bringing all aspects—from programming to funding to regulatory supervision—under the Media Council’s control. Hungary’s Media Authority has a range of powers over all aspects of media regulation. Critics have challenged the Media Council’s role in tendering and awarding broadcasting licenses in particular, including its powers to award licenses without a tender, as well as the Media Authority president’s power to issue ministerial-level decrees regarding licensing and spectrum fees.

In a relatively small media market a large portion of the available advertising revenue is made up of publicly-owned companies, such as the Hungarian National Bank, the postal service and the national lottery. Under Orbán, the bulk of these contracts have been directed to channels and publications seen as supportive of the government. Budapest’s Mertek Media Monitor reported, “Market competition among media agencies is clearly distorted by the biased award of state contracts.”

According to Mertek, commercially funded TV networks, newspapers, magazines, radio stations and websites can’t afford to risk alienating advertisers and suffering a loss in funding, which has resulted in self-censorship by many newsrooms.

Gábor Polyák, a Hungarian media lawyer, argues that Hungary’s Media Council could tame media entities by imposing heavy fines. For broadcasters fines can be up to 250 million forints (U.S.$ 900,000), on vague content-related charges. “They haven’t abused their power, but charging content violations is not the method commonly used,” he said, “Instead the government distort and reshape the advertising market in which state companies play an important role.”

Atmedia, a privately-owned ad sales agency based in Budapest and operating in the Czech Republic, Poland and Hungary, now sells all Hungary’s state media advertising — including state-owned TV networks Duna, M1, M2, M3 and M4 — and TV2, the country’s second-largest commercial TV network.

Recently, TV2 was purchased by Magyar Broadcasting Co., which is owned by Hungarian-born Hollywood producer Andrew Vajna, who was appointed by the Hungarian government as the head of its National Film Commission.

Beefing up TV2’s finances also had to do with the government’s initial intention to weaken RTL Klub, the market leader. In order to weaken its finances, in 2014 RTL Klub was levied an incremental revenue tax, however, after RTL filed a complaint with the European Commission, the levy was changed into a flat tax, which ultimately will benefit RTL, but not smaller players.

Another key consideration for selective allocation of state advertising funds is rooted in a recent showdown between Prime Minister Viktor Orbán and Hungarian media tycoon Lajos Simicska. Since Orbán felt that the businessman’s economic power would interfere with his own power, state companies’ ad spending in Simicska’s media outlets was drastically cut and redirected to the governing pro-Fidesz entities.

As for financing production, only three players in the Hungarian television arena have the financial strength for their own production facilities: RTL, TV2 and MTVA. This latter entity is the production unit of Duna Médiaszolgáltató Zrt., the state media group that also owns six TV networks.

Finally, a potential cooperation between the Polish and Hungarian television market might be realized in the form of a joint “V4 Channel” as proposed by Jacek Kurski, a former Polish Law and Justice minister who called upon the Visegrád countries (Poland, Czech Republic, Hungary and Slovakia) to promote shared values.

(Ethan J. Baxter contributed to the story from Budapest)

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