Domain 1 of 3 · Chapter 2 of 4

Data Privacy and Protection in Copilot

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Included in this chapter:

  • What stays inside the boundary, and what never trains the model
  • Copilot inherits your permissions, so oversharing leaks through it
  • Sensitivity labels gate what enters an answer and ride along to what comes out
  • Recognizing the exam pattern and mitigating sensitive-data risk

What protects Copilot data, and what each control is for

ControlWhat it doesWhat it does NOT doWho relies on it
Service boundary + no-training commitmentKeeps prompts, retrieved data, and responses inside Microsoft 365; excludes them from foundation-model trainingDecide which items you may seeEvery grounded Copilot interaction
Identity + permissions (inherited)Limits Copilot to content the signed-in user has at least view access toFix sites that are already oversharedEach user's results, per request
Sensitivity labels + encryption rightsHonors usage rights (EXTRACT to copy) and carries the highest-priority label onto outputRestrict access if no label or encryption is appliedLabeled, encrypted documents
Restricted SharePoint SearchTemporarily narrows which SharePoint sites Copilot can read to an allowed listAct as a security boundary or change site permissionsAdmins remediating oversharing (short-term)

Decision tree

Is the answer groundedin your work data?Bing web queryseparate terms; notin EU Data BoundaryNo (web)Do you have viewpermission on the item?Yes (work)Not surfacedCopilot never exceedsyour permissionsNoItem labeled andencrypted?YesSurfaced + protectedstays in service boundary;never trains the modelNoDo you hold theEXTRACT (copy) right?YesContent withheldlabel rights block the copy;Copilot won't return its textNoReturned with top labeloutput inherits highest-priority(most restrictive) source labelYesAlways: don't paste regulateddata into a prompt it doesn't need
Cheat sheet

Cheat sheet

  • Your prompts and work data never train the foundation models
  • Prompts, retrieved data, and responses stay in the Microsoft 365 service boundary
  • Copilot only surfaces content the signed-in user can already open
  • Oversharing leaks through Copilot because Copilot inherits loose permissions
  • Restricted SharePoint Search is a temporary stopgap, not a security boundary
  • Copilot honors sensitivity-label usage rights, returning encrypted content only with the copy right
  • Copilot output inherits the highest-priority (most restrictive) source label
  • Separate what Copilot CAN access from what SHOULD be surfaced
  • Don't paste regulated or sensitive data into a prompt that doesn't need it
  • Copilot is covered by GDPR and, for EU users, the EU Data Boundary
  • Web search queries leave the work boundary and aren't covered by the EU Data Boundary
  • Copilot interactions are stored, encrypted, and governable like other Microsoft 365 data
  • Data protection governs access and privacy, not whether the answer is correct
  • Copilot output carries no protection once you redistribute it
  • A Purview DLP policy can stop Copilot from processing labeled content

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Also tested in

References

  1. General Data Protection Regulation
  2. What is the EU Data Boundary?
  3. Enterprise data protection in Microsoft 365 Copilot and Microsoft 365 Copilot Chat
  4. Data, Privacy, and Security for Microsoft 365 Copilot
  5. Restricted SharePoint Search
  6. Learn about sensitivity labels