Chinese Developers Join Microsoft Marketplace—Is Buyer Data Safe From Beijing’s Reach?

• Chinese software vendors can now sell through Microsoft’s online marketplaces.
• The U.S. tech giant announced that China-based developers will now have access to sellers in over 140 geographies.
• The move raises questions about the potential concerns of U.S. lawmakers and businesses.

Microsoft has announced it will allow Chinese independent software vendors to sell through its online marketplaces and channels.

The move comes as tensions between the U.S. and China continue to be strained – with Chinese tech companies facing scrutiny for potential state influence and security vulnerabilities.

Microsoft Opens to Chinese Developers

Microsoft announced in a blog post  on Tuesday, Jan. 6, that it had started offering “expanded global marketplace opportunities for ISVs in China.”

“This expansion gives ISVs in China access to millions of enterprise customers and the extensive Microsoft partner ecosystem,” the blog post read.

Microsoft said the inclusion will allow Chinese software developers to:

• Generate more revenue by reaching customers across more than 140 geographies
• Simplify sales by leaning on the marketplace to streamline billing, payouts, and more
• Benefit from co-sell opportunities with the Microsoft sales teams

Microsoft will welcome business to the world’s second-biggest economy by opening its marketplace to China.

Global companies will likely find something new to help their business from the millions of Chinese individual software developers entering the market.

U.S. Companies Tread Lightly

However, although U.S. law generally allows companies to work with Chinese firms, many do so with caution because cross-sea partnerships are subject to a complex web of regulations and restrictions.

Many American firms will also tread lightly with Chinese-based firms, with worries surrounding intellectual property theft and cybersecurity.

Between mid-2023 and early 2025, Chinese hackers  infiltrated U.S. telecommunications networks, including major providers like Verizon and AT&T.

The breaches compromised the data of over a million individuals and highlighted vulnerabilities in critical infrastructure.

Sensitive Data Concerns

From a national security standpoint, the U.S. government may view Microsoft’s opening with concern.

Allowing China-based vendors to operate on a prominent U.S.-based platform like Microsoft’s marketplace might be perceived as exposing critical infrastructure and sensitive industries to potential risks.

This is similar to the issue of sensitive buyer data. When U.S. companies work with Chinese firms, they often handle sensitive buyer data, including customer demographics, purchasing habits, and financial information.

U.S. companies have a responsibility to protect citizens’ data, which may make it difficult to form partnerships with Chinese companies.

In February 2020, the U.S. government charged four  China’s People’s Liberation Army members with the 2017 Equifax data breach.

Equifax, a central credit reporting agency, experienced a cyberattack that compromised the personal information of around 147 million Americans and millions of British and Canadian citizens.

Despite China denying these claims, U.S. companies continue to move with caution when it comes to partnerships.

America’s Domestic Tech Dependency Dreams

The decision to open up collaboration with Chinese software developers could further amplify tensions between the U.S. and China.

Over the past few years, the Biden Administration has implemented  restrictions and policies to help amplify domestic technology manufacturing and eventually eliminate reliance on Chinese-made hardware and software.

As the U.S. moves to restrict and ban companies such as Huawei and TikTok, opening the U.S. market to millions of new Chinese software developers may be seen by lawmakers as a step backward.