Microsoft and Chinese online ecommerce giant Alibaba have signed a cooperation agreement to combat software piracy in China.

Alibaba Group announced on the Alizila News site that it's working with Microsoft to remove counterfeit products from Taobao and Tmall, which are online shopping sites in China similar to eBay.

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With a signed memorandum of understanding, the two companies agree to conduct programs to make customers aware of the dangers that come with counterfeit products and provide assistance in the compensation process if users are tricked by sellers.

Counterfeit products infringe Microsoft's intellectual property rights (IPR) and may pose dangerous threats to users' security and privacy. In 2011, Microsoft's then-CEO Steve Ballmer said the company lost 95 percent of its revenue in China because of counterfeit products that infringe their IPR.

A joint study by International Data Corporation and the National University of Singapore found 85 percent of computers with pirated software in China in 2013 were infected with dangerous malware. This research, sponsored by Microsoft, also found 61 percent infected in 11 countries.

"Microsoft has been a great partner on this front, and we believe that this agreement will go toward building an orderly e-commerce environment where consumers' interests are best protected," said Ni Liang, Alibaba's senior director of security operations.