Microsoft and Chinese online commerce giant Alibaba have signed a memorandum of understanding that will see the Chinese firm take measures to help protect Microsoft's intellectual property in its online stores.

Microsoft has long struggled with software piracy in China, with then-CEO Steve Ballmer saying in 2011 that the company was missing something like 95 percent of potential revenue due to lax protection of intellectual property rights.

With the new agreement in place, Alibaba will remove counterfeit and unlicensed software from its eBay-like Taobao marketplace and its Tmall B2C site. The two companies will also work together to tell consumers that counterfeit software poses risks to their security and privacy, with Alibaba also helping the unwitting buyers of unlicensed software seek compensation from sellers. A Microsoft-sponsored study claimed that some 85 percent of PCs sold with pirated software in China were infected with malware.

This agreement between the firms continues a working relationship that started in 2007.