The European Commission has announced it is taking the first step in legal action against Hungary over a new law that it says violates the principle of democracy, upping tensions with Budapest as the continent enters a fraught election season. The Hungarian prime minister, Viktor Orbán, has for years clashed with Brussels over democratic norms. In recent months the relationship has further soured amid concerns that an increasingly isolated Hungarian government is pursuing a Russia-friendly foreign policy and undermining western unity. While Budapest has argued it is carrying out reforms in line with EU requests, critics say Orbán is moving to further consolidate his power at home. In December, Hungary’s parliament approved a law that creates a new sovereignty protection office with broad powers to investigate Hungarians active in public life. The new office, which is led by a figure with close links to the ruling Fidesz party, can ask Hungary’s intelligence services for information on individuals and organisations, all without judicial oversight. In a statement on Wednesday, the European Commission said it had decided to send a letter of formal notice to Hungary for violations of EU law. “The commission considers that the Hungarian legislation at stake violates several provisions of primary and secondary EU law,” the commission said. It provided a long list of EU standards that it believes the new law undermines, including “the principle of democracy and the electoral rights of EU citizens” as well as “the right to protection of personal data, the freedom of expression and information, the freedom of association, the electoral rights of EU citizens, the right to an effective remedy and to a fair trial”. The move comes at a tense moment in Brussels’ complex relationship with Budapest, as a portion of Hungary’s EU funding remains frozen over rule of law concerns and as the bloc prepares for elections to the European parliament in June. There has been significant criticism of the new law inside and outside Hungary. Independent Hungarian media outlets have warned that the law is “capable of severely restricting the freedom of the press”, while leading civil society groups have cautioned it is “part of the government’s attempt to silence all critical voices”. The US government has also criticised the law. In an interview with the Guardian last month, the US ambassador in Budapest, David Pressman, said the creation of the new sovereignty protection office represented “a serious step backwards in Hungary’s democracy”. The European Commission said Hungary had two months to reply to its letter.