Microsoft has a big problem in China: counterfeit software. Its former CEO, Steve Ballmer, said at one point that 9 out of 10 copies of Windows sold in that country are counterfeit which represents a huge loss of revenue for the company.

To help fight this, Microsoft has signed a deal with Alibaba, the largest online commerce site for China, to remove sales of pirated content from its stores. The agreement, called a Memorandum of Understanding (MoU), will help Microsoft protect its intellectual property rights in this region.

Under the agreement that was sent to Neowin, the Alibaba Group will be required to remove any software deemed to be counterfeit that Microsoft finds on the Chinese company's sites. Further, the Alibaba Group will help those who buy counterfeit software obtain compensation from sellers who sold non-legitimate Microsoft software.

The benefits of this agreement are huge for Microsoft as it is a significant step to combatting piracy in a country that has been undercutting the company's revenues for decades by stealing software. While the agreement with the Alibaba Group will only likely make a small dent in the piracy fight, in a country with 1.3 billion people, even a small dent can mean a significant boost in revenues.

We will be curious to see how much of an impact this agreement has on piracy in China. While Alibaba is a massive retailer, and a very good start for Microsoft, many counterfeit products are sold on the streets, and not online.