Copilot gets less access to sensitive Office documents

"Until now, data loss prevention within Microsoft Purview only worked for documents in Microsoft's cloud services. Files stored on laptops or desktops were outside that scope. In practice, this meant Copilot could analyze locally stored documents, even when organizations had strict security rules in place. Microsoft is now putting an end to that limitation."

"Once this rollout is complete, DLP rules will apply to all Word, Excel, and PowerPoint files, regardless of their storage location. According to Microsoft, this step aligns better with the expectations of organizations that want to apply their security policies consistently, without distinguishing between local and cloud files."

"When a document is classified as sensitive or restricted by the security policy, Copilot cannot view or process it. Organizations that have already set up policies to block AI processing of labeled content will automatically benefit from the extension. No additional configuration or management actions are required."

Microsoft is expanding security protections for its Copilot AI assistant within Microsoft 365 by applying data loss prevention (DLP) rules to all Office documents, whether stored locally or in the cloud. Previously, DLP protections only applied to cloud-based files in SharePoint and OneDrive, leaving locally stored documents vulnerable to Copilot analysis. Beginning March-April 2026, an Office architecture update will eliminate this protection gap. When documents are classified as sensitive or restricted by security policies, Copilot will be automatically blocked from viewing or processing them. Organizations with existing policies for blocking AI processing of labeled content will automatically benefit without requiring additional configuration. The implementation leverages security labels retrieved directly from Office applications rather than relying solely on cloud connections.

Read at Techzine Global