By Sergiu Gatlan
Publication Date: 2026-02-24 17:30:00
Microsoft is expanding data loss prevention (DLP) controls to block the Microsoft 365 Copilot AI assistant from processing confidential Word, Excel, and PowerPoint documents, regardless of their location.
Currently, Microsoft Purview DLP policies apply only to files stored in SharePoint or OneDrive, but not to those stored on local devices.
This change will be deployed through the Augmentation Loop (AugLoop) Office component between late March and late April 2026 to ensure that DLP controls apply to all Office documents, whether they are stored locally, in SharePoint, or OneDrive.
“This enhancement responds to customer feedback requesting more consistent protection coverage across local and cloud-based file locations,” Microsoft said in a message center update.
Once the change is deployed, Copilot will not be able to read or process Word, Excel, or PowerPoint documents that are labeled as restricted by DLP controls.
Microsoft also stated that the changes…
