LONDON, March 31 (Reuters) - Britain's competition

regulator said on Tuesday it would launch a new investigation

into Microsoft's ( MSFT ) business software ecosystem in May, including

its use of software licensing in the cloud market.

A Competition and Markets Authority's inquiry group said

last year the dominance of Amazon ( AMZN ) and Microsoft ( MSFT )

was harming competition in cloud computing.

The CMA said on Tuesday the two companies were taking

"material steps" to lower some of their fees in the cloud

market.

However, Microsoft ( MSFT ) could be assigned "strategic market

status" in business software as a result of its new inquiry,

which would allow the regulator to act on software licensing.