How to hide information from Microsoft 365 Copilot (portal and PowerShell)

Microsoft 365 Copilot does not have a “do not read this” switch. It reads what the person asking is allowed to read, and nothing else. So hiding information from Copilot is really four different jobs: remove access that nobody needs, keep content out of discovery (search and Copilot grounding), stop Copilot from processing labelled or sensitive content, and switch off entry points such as web search, agents or Copilot in Teams meetings. This guide lists every option Microsoft offers for those jobs, how to configure each in the portal and in PowerShell, and what each one does not do.

The principle: Copilot only shows what the user can already open

Microsoft states that Copilot “only surfaces organizational data to which individual users have at least view permissions”, and that the semantic index “honors the user identity-based access boundary”. Encrypted content is handled the same way: Copilot honours the usage rights the user has. Two consequences follow:

• Copilot does not create new access. It makes existing access visible. A file shared with “everyone in the organisation” that nobody ever found becomes findable with one question.
• Hiding is never absolute. Most options below change what Copilot can discover or process, not what a user can open. A user who has a file open, or opens it later by URL, can still use Copilot on it unless a label or DLP rule says otherwise.

Overview: which option does what

Step 0: Find out what Copilot can reach

Do this before you configure anything. Otherwise you are guessing.

SharePoint Advanced Management: data access governance reports

SharePoint admin center → Reports → Data access governance. The most useful reports:

• Site permissions across your organization: how many people can reach each site.
• Sharing links (Anyone, People in your organization, Guests) and Shared with “Everyone except external users”.
• Sensitivity label applied to files: what is labelled and what is not.

The same reports in PowerShell:

Connect-SPOService -Url https://contoso-admin.sharepoint.com

# Sites where more than 0 users have permissions (snapshot)
Start-SPODataAccessGovernanceInsight -ReportEntity PermissionedUsers -ReportType Snapshot -Workload SharePoint -CountOfUsersMoreThan 0 -Name "OrgWidePermissionedUsers"

# Sites shared with "Everyone except external users" (recent activity)
Start-SPODataAccessGovernanceInsight -ReportEntity EveryoneExceptExternalUsersAtSite -Workload SharePoint -ReportType RecentActivity -Name "PublicSitesViaEEEU"

# Sharing links of type Anyone (also SharingLinks_PeopleInYourOrg, SharingLinks_Guests)
Start-SPODataAccessGovernanceInsight -ReportEntity SharingLinks_Anyone -Workload SharePoint -ReportType RecentActivity -Name "AnyoneLinks"

# Read and export the result
Get-SPODataAccessGovernanceInsight -ReportID <report GUID>
Export-SPODataAccessGovernanceInsight -ReportID <report GUID> -DownloadPath "C:\Reports"

Activity reports cover the last 28 days. SharePoint Advanced Management is available once at least one Copilot licence is assigned in the tenant, or with the SharePoint Advanced Management Plan 1 add-on (included in Microsoft 365 E7). Some features, such as restricted site creation, need the add-on.

Purview: data risk assessments (oversharing)

Microsoft Purview portal → Solutions → DSPM → Discover → Data risk assessments. The default assessment runs weekly on the 100 most used SharePoint sites and shows sensitive items and links shared with anyone. A custom assessment lets you choose users and data sources; its Potentially overshared items tab lists items with external or anonymous links. Limits to know: at most 200,000 items per location, at most 10 SharePoint sites for item-level scanning, and no item-level scanning of OneDrive. The classic DSPM and DSPM for AI pages still exist under those names; new features land in the new DSPM.

Option 1: Fix the permissions (the real fix)

Everything else on this page is a guardrail. The durable answer is that the wrong people can no longer open the content. In practice:

• Remove “Everyone except external users” from sites and groups that should not be company-wide.
• Replace broad sharing links (“Anyone”, “People in your organization”) with direct access for the people who need it.
• Give the site an owner and use Site access reviews (a SharePoint Advanced Management feature) so owners confirm who should still have access.
• Apply a sensitivity label to the site itself so the sharing rules follow the classification.

Microsoft’s own deployment guidance for Copilot follows this order: first find and reduce oversharing, then put guardrails in place, then meet regulatory requirements (see the end of this guide).

Option 2: Restricted Content Discovery (RCD)

RCD is the quickest interim measure for a site you cannot clean up yet, such as an HR, legal or board site. It keeps the site’s content out of organisation-wide search and out of Copilot and agent discovery. It also removes AI entry points on that site: the Copilot button, the AI actions menu and “Create pages with AI”.

Portal

SharePoint admin center → Sites → Active sites → select the site → Settings tab → turn on Restrict content from Microsoft Copilot → Save. Some Microsoft pages call this toggle “Restrict content discovery”. The label may change again, so look for the RCD wording.

PowerShell

Connect-SPOService -Url https://contoso-admin.sharepoint.com

# Turn RCD on for one site (use $false to turn it off)
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/HR -RestrictContentOrgWideSearch $true

# Check
Get-SPOSite -Identity https://contoso.sharepoint.com/sites/HR | Select-Object Url, RestrictContentOrgWideSearch

# Let site admins manage RCD themselves (they must then give a justification)
Set-SPOTenant -DelegateRestrictedContentDiscoverabilityManagement $true

# Report: which sites have RCD on
Start-SPORestrictedContentDiscoverabilityReport
Get-SPORestrictedContentDiscoverabilityReport
Get-SPORestrictedContentDiscoverabilityReport -Action Download -ReportId <report GUID>

Propagation depends on site size. For sites with more than 500,000 items it can take more than a week. Turning RCD on and off is recorded in the Purview audit log.

Option 3: Restricted Access Control (RAC)

RAC is stricter: only users who are in one of the designated groups can reach the site, even if they have direct permissions or a sharing link. Microsoft states that users with direct permissions but outside the groups “will not be able to view the file in search or Copilot experiences”. Use it for business-critical sites. A user needs both the normal permission and membership of a RAC group; group membership alone grants nothing.

• Up to 10 Microsoft 365 groups or security groups per site.
• Teams shared and private channels have their own sites. Set RAC on each one.
• Turning the tenant setting on can take up to an hour.
• For OneDrive the owner must be in one of the groups, or they lose access to their own OneDrive.

Portal

Tenant switch: SharePoint admin center → Policies → Access control → Site-level access restriction → allow access restriction → Save. Per site: Sites → Active sites → select the site → Settings tab → Restricted site access → Edit → tick “Restrict SharePoint site access to only users in specified groups” → add the groups → Save.

PowerShell

# Once, for the tenant
Set-SPOTenant -EnableRestrictedAccessControl $true

# Per site: switch on and add groups (object IDs of the groups)
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/Board -RestrictedAccessControl $true
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/Board -AddRestrictedAccessControlGroups "<group GUID 1>,<group GUID 2>"

# Replace, remove or clear
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/Board -RestrictedAccessControlGroups "<group GUID>"
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/Board -RemoveRestrictedAccessControlGroups "<group GUID>"
Set-SPOSite -Identity https://contoso.sharepoint.com/sites/Board -ClearRestrictedAccessControl

# Check
Get-SPOSite -Identity https://contoso.sharepoint.com/sites/Board | Select-Object Url, RestrictedAccessControl, RestrictedAccessControlGroups

# Report: which sites are protected
Start-SPORestrictedAccessForSitesInsights -RACProtectedSites
Get-SPORestrictedAccessForSitesInsights -RACProtectedSites -ReportId <report GUID> -Action Download

The same syntax works for OneDrive URLs. Two tenant settings are worth knowing: Set-SPOTenant -DelegateRestrictedAccessControlManagement $true lets site admins manage RAC, and Set-SPOTenant -AllowSharingOutsideRestrictedAccessControlGroups $false stops sharing with people outside the groups.

Option 4: Sensitivity labels that Copilot cannot read out

When a label applies encryption, the EXTRACT usage right (shown as Copy and extract content) decides whether Copilot may show text from the item. Microsoft’s wording: it is the right “that determines whether Copilot or agents can display text to the user from encrypted content”. A user who has VIEW but not EXTRACT:

• cannot use Copilot while the content is open in an Office app;
• gets no summary from Copilot; Copilot can only reference the item with a link.

Full Control includes EXTRACT, so owners are not affected. Encryption applied without a label (an IRM restriction, for example) behaves the same way.

Portal

Microsoft Purview portal → Information Protection → Sensitivity labels → create or edit a label → scope Files & other data assets → Control access → Configure access control settings → Assign permissions now → Assign permissions → add users or groups → Choose permissions → custom, and leave out Copy and extract content (EXTRACT). Publish the label in a label policy.

Keep labelled content away from Office app Copilot

An advanced label setting stops Word, Excel and PowerPoint (and Outlook on older Windows clients) from using content with that label:

Connect-IPPSSession
Set-Label -Identity "<label GUID>" -AdvancedSettings @{BlockContentAnalysisServices="True"}

Content with this setting stays available to Copilot for other scenarios, such as in Teams and Copilot Chat, so combine it with the DLP option below.

For encrypted mail, Copilot in Outlook needs at least version 2408 of classic Outlook for Windows (Current Channel or Monthly Enterprise Channel), 16.86.609 for Mac, or 4.2420.0 for the Outlook mobile apps. Outlook on the web and new Outlook are supported.

Option 5: DLP policy for the Copilot location

A Data Loss Prevention policy can tell Copilot not to process items that carry certain sensitivity labels. The items can still appear as citations, but their content is not used to build the answer. The same location can block prompts that contain sensitive information types, and block web search for those prompts.

Portal

1. Purview portal → Data Loss Prevention → Policies → + Create policy → Custom template → Custom policy.
2. On Locations, turn on Microsoft 365 Copilot and Copilot Chat.
3. Add a rule. For labels: condition Content contains → Sensitivity labels, action Prevent Copilot from processing content. For prompts: condition Content contains → Sensitive information types, action Prevent Copilot from processing content → Processing prompts or Performing web searches.
4. Save and turn the policy on. Start in simulation if you are unsure what it will hit.

Limits that catch people out: you cannot combine label and sensitive-information-type conditions in one rule; choosing this location disables all other locations in that policy; the location is only in the Custom template and does not support administrative units; DLP checks typed prompts, not files uploaded into a prompt; a change can take up to 4 hours to reach Copilot; only mail sent from 1 January 2025 onward is covered; and calendar invites are not supported. A preview capability also lets you exclude email from external senders from Copilot grounding.

Microsoft creates a Default DLP policy – Protect sensitive M365 Copilot interactions. It starts in simulation mode, so it blocks nothing until you switch it to enforce.

PowerShell

The portal is the supported route, especially for the rule. For the policy, the New-DlpCompliancePolicy reference documents this example (check it in a test tenant first):

Connect-IPPSSession
$loc = '[{"Workload":"Applications","Location":"470f2276-e011-4e9d-a6ec-20768be3a4b0","Inclusions":[{"Type":"Tenant","Identity":"All"}]}]'
New-DlpCompliancePolicy -Name "Copilot - confidential" -Locations $loc -EnforcementPlanes @("CopilotExperiences")

The rule that blocks processing uses New-DlpComplianceRule with -RestrictAccess @(@{setting="ExcludeContentProcessing";value="Block"}) and an advanced rule that names the label. Building that condition by hand is error-prone; create the rule in the portal and read it back with Get-DlpComplianceRule.

Licensing. Microsoft lists DLP for Copilot and DSPM for AI in the “Optimized” tier (Microsoft 365 E5 or equivalent), while audit and retention are foundational. Confirm against the Purview service description for your plan before you plan around it.

Option 6: Exclude a site from search results

Microsoft’s semantic-index documentation describes one way to keep a SharePoint site out of the index Copilot uses: the site setting Allow this site to appear in search results, set to No.

Site → Settings → Site information → View all site settings → Search and offline availability → Allow this site to appear in search results → No.

Microsoft says there is no option to exclude from Microsoft Search only or from the semantic index only; the action applies to both, and it applies to the tenant-level index. The trade-off is that the site also disappears from normal search. We did not find a Microsoft statement that library-level exclusion removes content from Copilot, so do not rely on it. Compared with RCD, which keeps the content in the search index (so eDiscovery and auto-labelling keep working), this option removes it from the index.

Option 7: Mail and Teams

Outlook and Exchange

There is no per-mailbox opt-out for Copilot and no separate admin policy for Copilot in Outlook. What works is the same as in SharePoint: labels with encryption that omit EXTRACT, and the DLP location (labelled email; and, in preview, email from external senders). Copilot in Outlook uses the mail the signed-in user can open. Copilot does not give extra access rights on top of the mailbox permissions.

Teams meetings

Teams admin center → Meetings → Meeting policies → select a policy → Recording & transcription → Copilot. In PowerShell:

Connect-MicrosoftTeams
Set-CsTeamsMeetingPolicy -Identity Global -Copilot Disabled
Get-CsTeamsMeetingPolicy -Identity Global | Select-Object Identity, Copilot, AllowTranscription, AllowCloudRecording

The cmdlet reference lists only Enabled and EnabledWithTranscript, while the meetings documentation lists all four, so test the value you want. Two things to know: Disabled is a default, not a lock, and when Copilot is off for a meeting, recording and transcription are off too. If transcripts are off, auditing, eDiscovery and retention of the Copilot interactions in that meeting are not supported. There is no separate Teams policy to disable Copilot in chats and channels. Use labels, DLP and permissions there.

Option 8: Web search, agents, connectors and licences

Web search

Copilot can add public web results to an answer. The Allow web search in Copilot policy exists only in the Cloud Policy service: config.office.com → Customization → Policy Management → Create → choose the scope (all users or groups) → Configure Settings → search for the policy. Options: enabled, disabled in Copilot and Copilot Chat, or disabled in work mode while enabled in web mode. If you never configure it, web search is available unless Allow the use of additional optional connected experiences in Office is disabled. There is no PowerShell for this policy. For a narrower rule, the DLP location above can block web search only when a prompt contains chosen sensitive information types.

Agents

Microsoft 365 admin center → Copilot → Settings → Data access → Agents decides who may use agents and which types are allowed (Microsoft, external publishers, your organisation). Under Agents → All agents you can review an agent’s data and tools, and block it; a blocked agent cannot be unblocked afterwards. Agents respect the user’s permissions, so they see no more than the user does.

Copilot connectors (Graph connectors)

Microsoft 365 admin center → Copilot → Connectors → Your connections. The Copilot visibility toggle excludes a connection from all Copilot search and chat results (allow up to 30 minutes). A connection is either visible only to people with access in the source, or visible to everyone, and this cannot be changed after creation: you delete and recreate the connection. Labels and encryption on external data are not recognised by Copilot.

Who gets Copilot at all

Copilot licences are assigned per user or group under Billing → Licenses. Copilot Chat is available to eligible Microsoft 365 users without the add-on licence. Unpinning Copilot Chat does not remove access; to block it you need the block setting under Copilot → Settings. This is the bluntest tool, but it is the only one that fully removes a person’s use of Copilot.

OneDrive

RCD does not support OneDrive. RAC does, with the same cmdlets as for sites, and labels and DLP work on files in OneDrive. Because OneDrive content is private by default, the main risk is sharing: review the Anyone and organisation-wide links from Step 0.

Check that it works

1. Test as a normal user. Sign in as a test account that has access to the protected site, and one that does not. Ask Copilot for something only that content can answer. Allow time: RCD and RAC can take hours to days on large sites, and DLP up to 4 hours.
2. Audit. Purview portal → Audit: search the CopilotInteraction operation. It records who used Copilot, when, and which resources were accessed (files, URLs, labels). It does not hold the prompt or response text.
3. Read the prompts and responses. Use Purview eDiscovery or DSPM Activity Explorer. Retention policies for the location Microsoft Copilot experiences control how long the interactions are kept.
4. Repeat the reports. Run the data access governance reports and the data risk assessment again after the change.

Restricted SharePoint Search is going away

Restricted SharePoint Search (RSS), the older “allow list” approach, is being retired. Microsoft blocks new enablement from 31 July 2026. According to Message Center post MC1395311, it ends on 31 January 2027, the cmdlets stop working on 28 February 2027, and configurations are not migrated automatically. If you still use RSS, plan the move to RCD (to exclude sites) and RAC (to control access) now. RSS was limited to an allow list of 100 sites.

Recommended order

Microsoft’s deployment guidance for securing Copilot follows three pillars. A practical version for a first tenant-wide rollout:

1. Find. Run the data access governance reports and a data risk assessment. List the top ten sites by risk.
2. Protect quickly. Put RCD on the sites that must not surface yet, and enable a DLP policy for labelled content in simulation.
3. Fix. Remove broad access and links, run site access reviews, label the sites. Then remove the interim RCD where the permissions are now correct.
4. Set guardrails. RAC for business-critical sites, label defaults for new sites, auto-labelling where licensed, DLP in enforce mode.
5. Keep checking. Review audit and DSPM activity, and rerun the reports every quarter.
6. Decide retention. Choose how long Copilot interactions are kept and who may search them in eDiscovery.

What none of this does

• It does not stop a user reading a file they are allowed to open. Only permissions do.
• It is not instant. Expect delays from an hour to several days depending on the option and the site size.
• It does not cover everything Copilot touches. External data in connectors, Teams meeting and chat labels, and container labels are outside the label model.
• It needs licences you may not have. Check what your Copilot licence includes for SharePoint Advanced Management, and what your Microsoft 365 plan includes for Purview, before you design around a feature.

Sources: Microsoft Learn pages on Restricted Content Discovery, Restricted Access Control, Microsoft 365 Copilot and Purview considerations, DLP for the Copilot location, the semantic index, SharePoint Advanced Management, DSPM data risk assessments, Teams meeting Copilot and the Cloud Policy web search policy, all read on 28 September 2026.