Security & Risk

Microsoft Copilot Oversharing: How to Prevent Sensitive Data Exposure

Microsoft 365 Copilot doesn't create permission problems—it exposes them. Organizations discover this when a junior marketing coordinator asks Copilot for "e...

Copilot Consulting

August 30, 2025

19 min read

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Table of Contents

What is Copilot Oversharing?Identifying Overshared Content: Technical Assessment Remediation Strategies: Removing Excessive Permissions Preventing Oversharing with Sensitivity Labels DLP Policies to Block Copilot Oversharing Ongoing Governance: Preventing Future Oversharing Frequently Asked Questions

Illustration 1 for Microsoft Copilot Oversharing: How to Prevent Sensitive Data Exposure

Microsoft 365 Copilot doesn't create permission problems—it exposes them. Organizations discover this when a junior marketing coordinator asks Copilot for "executive compensation data" and receives a spreadsheet that was shared with "Everyone" five years ago. The permissions weren't violated. They were technically correct. But nobody intended for that data to be accessible to the entire company.

This is the Copilot oversharing problem: AI-powered semantic search treats every document a user can access as fair game for retrieval, regardless of whether that access was intentional, forgotten, or the result of broken permission inheritance. Research shows 73% of Microsoft 365 tenants have at least one SharePoint site with "Everyone" permissions, and the average tenant has 10,000+ documents with overly permissive access grants.

Copilot amplifies this exponentially. Traditional SharePoint search required users to know what they were looking for and where to find it. Copilot eliminates that friction—ask "What's our M&A strategy?" and the AI retrieves confidential board documents from a site you didn't know existed, accessed through group membership you forgot you had.

This guide provides the technical framework for identifying overshared content, remediating excessive permissions, and implementing governance controls to prevent Copilot from exposing sensitive data.

What is Copilot Oversharing?

Copilot oversharing occurs when Microsoft 365 Copilot retrieves and surfaces documents to users who have technical permission to access them, but shouldn't from a business, security, or compliance perspective.

The "Everyone" Problem

The most common oversharing vector is the "Everyone" group (also called "All Company" or "All Users" in some tenants). This default group includes every user in the Azure AD tenant. When granted read access to a SharePoint site or document library, it makes all content accessible to all employees.

Why "Everyone" permissions exist:

Default permission when creating SharePoint sites (pre-2020 behavior)
Convenience during rapid collaboration ("just share it with everyone")
Misunderstanding of SharePoint permission model
Legacy sites created before governance policies existed
External consultants who didn't understand implications

Impact on Copilot:

Junior employees can retrieve executive compensation documents
Marketing teams access confidential M&A deal information
Contractors (who shouldn't have access) retrieve IP and trade secrets
Employees in one business unit access another unit's sensitive data

Statistics:

73% of organizations have at least one "Everyone" permission grant
Average Fortune 500 tenant: 847 SharePoint sites with "Everyone" access
Average document exposure: 18,500 documents accessible to all employees
Time to audit and remediate manually: 2,400+ hours

Broken Permission Inheritance

SharePoint permission inheritance creates cascading access grants that are impossible to track manually. A user granted access to a site automatically inherits access to all libraries, folders, and documents within that site—unless inheritance is explicitly broken at a lower level.

Permission inheritance chain:

SharePoint Site (Everyone: Read)
  └─ Document Library (Inherits: Everyone: Read)
      └─ Folder: "Finance" (Inherits: Everyone: Read)
          └─ Document: "2025-Budget.xlsx" (Inherits: Everyone: Read)

What breaks when inheritance is assumed:

IT creates site with "Everyone" access for general announcements
Finance department creates "Budget" library within that site
Finance assumes the library is private because they created it
Finance uploads confidential budget files
Copilot indexes all budget files as accessible to "Everyone"
Marketing coordinator asks Copilot "What's the marketing budget for 2025?"
Copilot retrieves confidential budget file (technically correct permissions)

Root cause: SharePoint's default behavior is inheritance. Breaking inheritance requires explicit action. Most users don't know how, don't remember to, or assume it's already done.

Nested Group Membership

Azure AD group nesting creates transitive permissions that users don't realize they have. A user added to "Marketing Team" might unknowingly gain access to confidential content because "Marketing Team" is a member of "All Managers," which has access to HR data.

Permission path example:

User: john.smith@contoso.com
  └─ Member of: Marketing Team
      └─ Member of: All Managers
          └─ Has access to: SharePoint Site "HR Confidential"
              └─ Contains: "Performance Reviews 2025.xlsx"

What breaks:

John asks Copilot "How did the sales team perform this year?"
Copilot searches across all accessible content
John's group membership gives him access to HR site (forgotten/unknown)
Copilot retrieves performance review document
John now knows sales team compensation and performance ratings

Detection complexity:

Manual audit requires checking every user's group memberships
Then checking every group's nested parent groups (recursive)
Then checking every SharePoint site's permission grants
Then mapping which groups have access to which sites
Average large enterprise: 50,000+ user-to-document permission paths

Learn more about our Permission Analysis service.

Identifying Overshared Content: Technical Assessment

Before remediation, you need comprehensive visibility into permission sprawl.

Step 1: Audit All SharePoint Sites with "Everyone" Permissions

# Identify all SharePoint sites with "Everyone" or "All Company" access
Connect-SPOService -Url "https://contoso-admin.sharepoint.com"

$sites = Get-SPOSite -Limit All
$everyoneSites = @()

foreach ($site in $sites) {
    try {
        $siteUsers = Get-SPOUser -Site $site.Url

        $everyoneAccess = $siteUsers | Where-Object {
            $_.LoginName -like "*spo-grid-all-users*" -or
            $_.LoginName -like "*Everyone*" -or
            $_.LoginName -like "*All Company*"
        }

        if ($everyoneAccess) {
            $everyoneSites += [PSCustomObject]@{
                SiteUrl = $site.Url
                Title = $site.Title
                Owner = $site.Owner
                Created = $site.Created
                LastModified = $site.LastContentModifiedDate
                StorageUsedMB = [math]::Round($site.StorageUsageCurrent, 2)
                PermissionLevel = ($everyoneAccess.LoginName -join "; ")
            }

            Write-Warning "OVERSHARING DETECTED: $($site.Title) - Everyone has access"
        }
    }
    catch {
        Write-Warning "Failed to check permissions for $($site.Url): $_"
    }
}

# Export results
$everyoneSites | Export-Csv -Path "C:\Audit\EveryoneSites.csv" -NoTypeInformation

Write-Output "Found $($everyoneSites.Count) sites with Everyone permissions"
Write-Output "Total storage exposed: $(($everyoneSites | Measure-Object -Property StorageUsedMB -Sum).Sum) MB"

Expected results:

List of all sites accessible to entire organization
Total data volume exposed (MB/GB)
Site owners responsible for remediation
Creation dates (older sites = higher risk of forgotten permissions)

Step 2: Identify Documents with Broken Inheritance

# Find all documents that have broken permission inheritance (custom permissions)
$sites = Get-SPOSite -Limit All
$brokenInheritance = @()

foreach ($site in $sites) {
    try {
        Connect-PnPOnline -Url $site.Url -Interactive

        $lists = Get-PnPList | Where-Object { $_.BaseTemplate -eq 101 }  # Document libraries

        foreach ($list in $lists) {
            $items = Get-PnPListItem -List $list.Id -PageSize 1000

            foreach ($item in $items) {
                if ($item.HasUniqueRoleAssignments) {
                    $itemPermissions = Get-PnPProperty -ClientObject $item -Property RoleAssignments

                    $brokenInheritance += [PSCustomObject]@{
                        SiteUrl = $site.Url
                        Library = $list.Title
                        FileName = $item.FieldValues.FileLeafRef
                        FilePath = $item.FieldValues.FileRef
                        HasCustomPermissions = $true
                        PermissionCount = $itemPermissions.Count
                        Modified = $item.FieldValues.Modified
                        ModifiedBy = $item.FieldValues.Editor.LookupValue
                    }
                }
            }
        }
    }
    catch {
        Write-Warning "Failed to analyze $($site.Url): $_"
    }
}

$brokenInheritance | Export-Csv -Path "C:\Audit\BrokenInheritance.csv" -NoTypeInformation

Write-Output "Found $($brokenInheritance.Count) documents with custom permissions"

Risk indicator: Documents with broken inheritance often have overly permissive custom permissions that site owners forgot about.

Step 3: Analyze Transitive Permissions via Group Nesting

# Map all users' transitive permissions through nested group memberships
Connect-AzureAD

$allUsers = Get-AzureADUser -All $true
$transitivePermissions = @()

foreach ($user in $allUsers) {
    # Get all groups user is a member of (direct and nested)
    $groups = Get-AzureADUserMembership -ObjectId $user.ObjectId -All $true

    foreach ($group in $groups) {
        # Get parent groups (nested membership)
        $parentGroups = Get-AzureADGroupMembership -ObjectId $group.ObjectId -All $true

        foreach ($parentGroup in $parentGroups) {
            $transitivePermissions += [PSCustomObject]@{
                UserPrincipalName = $user.UserPrincipalName
                DisplayName = $user.DisplayName
                Department = $user.Department
                DirectGroup = $group.DisplayName
                ParentGroup = $parentGroup.DisplayName
                PermissionPath = "$($user.DisplayName) → $($group.DisplayName) → $($parentGroup.DisplayName)"
            }
        }
    }
}

$transitivePermissions | Export-Csv -Path "C:\Audit\TransitivePermissions.csv" -NoTypeInformation

# Identify high-risk scenarios: users with > 50 group memberships
$highRiskUsers = $transitivePermissions |
    Group-Object UserPrincipalName |
    Where-Object { $_.Count -gt 50 } |
    Select-Object Name, Count

$highRiskUsers | Export-Csv -Path "C:\Audit\HighRiskUsers.csv" -NoTypeInformation

Step 4: Identify Dormant Accounts with Lingering Access

# Find inactive users who still have SharePoint access (potential contractor/terminated employee accounts)
$inactiveDays = 90
$cutoffDate = (Get-Date).AddDays(-$inactiveDays)

$allUsers = Get-AzureADUser -All $true
$dormantAccounts = @()

foreach ($user in $allUsers) {
    # Check last sign-in date
    $signInActivity = Get-AzureADAuditSignInLogs -Filter "userPrincipalName eq '$($user.UserPrincipalName)'" -Top 1

    if (-not $signInActivity -or $signInActivity.CreatedDateTime -lt $cutoffDate) {
        # Check if user still has SharePoint access
        $sites = Get-SPOSite -Limit All
        $accessCount = 0

        foreach ($site in $sites) {
            $siteUsers = Get-SPOUser -Site $site.Url | Where-Object { $_.LoginName -eq $user.UserPrincipalName }
            if ($siteUsers) { $accessCount++ }
        }

        if ($accessCount -gt 0) {
            $dormantAccounts += [PSCustomObject]@{
                UserPrincipalName = $user.UserPrincipalName
                DisplayName = $user.DisplayName
                LastSignIn = if ($signInActivity) { $signInActivity.CreatedDateTime } else { "Never" }
                DaysSinceLastSignIn = if ($signInActivity) { ((Get-Date) - $signInActivity.CreatedDateTime).Days } else { "Unknown" }
                SharePointSitesWithAccess = $accessCount
                AccountStatus = $user.AccountEnabled
            }
        }
    }
}

$dormantAccounts | Export-Csv -Path "C:\Audit\DormantAccounts.csv" -NoTypeInformation

Write-Output "Found $($dormantAccounts.Count) dormant accounts with SharePoint access"
Write-Output "Total sites accessible by dormant accounts: $(($dormantAccounts | Measure-Object -Property SharePointSitesWithAccess -Sum).Sum)"

Security risk: Dormant accounts with lingering permissions are prime targets for credential compromise and privilege escalation attacks.

Learn more about our Oversharing Risk Assessment service.

Remediation Strategies: Removing Excessive Permissions

After identifying overshared content, implement structured remediation.

Strategy 1: Remove "Everyone" Permissions

Approach: Remove "Everyone" group from all SharePoint sites except those explicitly intended for company-wide access (e.g., HR policies, IT announcements).

# Remove "Everyone" permissions from all sites (except approved list)
$approvedEveryoneSites = @(
    "https://contoso.sharepoint.com/sites/CompanyAnnouncements",
    "https://contoso.sharepoint.com/sites/HRPolicies"
)

$sites = Get-SPOSite -Limit All

foreach ($site in $sites) {
    if ($approvedEveryoneSites -contains $site.Url) {
        Write-Output "SKIPPING: $($site.Title) - Approved for Everyone access"
        continue
    }

    try {
        Connect-PnPOnline -Url $site.Url -Interactive

        # Get site users
        $everyoneUsers = Get-PnPUser | Where-Object {
            $_.LoginName -like "*spo-grid-all-users*" -or
            $_.LoginName -like "*Everyone*"
        }

        foreach ($user in $everyoneUsers) {
            Remove-PnPUser -Identity $user.LoginName -Force
            Write-Output "REMOVED: Everyone from $($site.Title)"
        }

        # Log remediation action
        Add-Content -Path "C:\Audit\Remediation-Log.txt" -Value "$(Get-Date) - Removed Everyone from $($site.Url)"
    }
    catch {
        Write-Warning "Failed to remediate $($site.Url): $_"
    }
}

Impact: Immediately reduces Copilot's accessible content scope. Users lose access to documents they shouldn't have had.

Communication plan required: Email site owners notifying them of permission changes. Provide escalation path for legitimate access requests.

Strategy 2: Replace "Everyone" with Specific Security Groups

Approach: Grant access to specific Azure AD security groups based on business role, not entire company.

# Replace "Everyone" with role-based security groups
$siteAccessMapping = @{
    "https://contoso.sharepoint.com/sites/Finance" = @("Finance-Team", "Finance-Leadership", "Executive-Team")
    "https://contoso.sharepoint.com/sites/Engineering" = @("Engineering-Team", "Product-Management", "Executive-Team")
    "https://contoso.sharepoint.com/sites/HR" = @("HR-Team", "People-Operations", "Executive-Team")
}

foreach ($site in $siteAccessMapping.Keys) {
    try {
        Connect-PnPOnline -Url $site -Interactive

        # Remove Everyone
        $everyoneUsers = Get-PnPUser | Where-Object { $_.LoginName -like "*Everyone*" }
        foreach ($user in $everyoneUsers) {
            Remove-PnPUser -Identity $user.LoginName -Force
        }

        # Add specific groups
        foreach ($groupName in $siteAccessMapping[$site]) {
            $group = Get-AzureADGroup -Filter "DisplayName eq '$groupName'"

            if ($group) {
                Add-PnPGroupMember -LoginName $group.Mail -Group "Members"
                Write-Output "ADDED: $groupName to $site"
            }
        }
    }
    catch {
        Write-Warning "Failed to update $site: $_"
    }
}

Strategy 3: Implement Time-Bound Access Grants

Approach: Use Azure AD Privileged Identity Management (PIM) or custom workflows to grant temporary access that auto-expires.

# Grant time-bound access to SharePoint site (custom implementation)
function Grant-TimeBoundAccess {
    param(
        [string]$SiteUrl,
        [string]$UserEmail,
        [int]$DurationDays,
        [string]$Justification
    )

    Connect-PnPOnline -Url $SiteUrl -Interactive

    # Grant access
    Add-PnPGroupMember -LoginName $UserEmail -Group "Members"

    # Schedule removal
    $expirationDate = (Get-Date).AddDays($DurationDays)

    # Log for scheduled removal job
    $accessGrant = [PSCustomObject]@{
        SiteUrl = $SiteUrl
        UserEmail = $UserEmail
        GrantedDate = (Get-Date)
        ExpirationDate = $expirationDate
        Justification = $Justification
        Status = "Active"
    }

    $accessGrant | Export-Csv -Path "C:\Audit\TimeBoundAccess.csv" -Append -NoTypeInformation

    Write-Output "Access granted to $UserEmail for $DurationDays days. Expires: $expirationDate"
}

# Example usage
Grant-TimeBoundAccess -SiteUrl "https://contoso.sharepoint.com/sites/Finance" `
    -UserEmail "contractor@external.com" `
    -DurationDays 30 `
    -Justification "Q3 audit support - approved by CFO"

Automated removal job (schedule daily):

# Daily job to remove expired access grants
$timeBoundAccess = Import-Csv -Path "C:\Audit\TimeBoundAccess.csv"
$now = Get-Date

foreach ($grant in $timeBoundAccess) {
    if ($grant.Status -eq "Active" -and [DateTime]$grant.ExpirationDate -lt $now) {
        try {
            Connect-PnPOnline -Url $grant.SiteUrl -Interactive
            Remove-PnPUser -Identity $grant.UserEmail -Force

            $grant.Status = "Expired - Removed"
            Write-Output "REMOVED: $($grant.UserEmail) from $($grant.SiteUrl) - Expired"
        }
        catch {
            Write-Warning "Failed to remove $($grant.UserEmail): $_"
        }
    }
}

$timeBoundAccess | Export-Csv -Path "C:\Audit\TimeBoundAccess.csv" -NoTypeInformation

Learn more about our Permission Remediation service.

Preventing Oversharing with Sensitivity Labels

Sensitivity labels provide content-level access controls that override SharePoint permissions.

How Sensitivity Labels Block Copilot Access

When a document has a sensitivity label with encryption, Copilot respects the label's access restrictions regardless of SharePoint permissions. A document labeled "Confidential - Executives Only" with encryption restricting access to the "Executive-Team" group won't be retrieved by Copilot for users outside that group—even if they have read access to the SharePoint site.

Technical mechanism:

User asks Copilot a query
Copilot performs semantic search across accessible documents
Document with "Confidential - Executives Only" label is found
Copilot checks if user has decryption rights for the label
User is not in "Executive-Team" group → access denied
Document is excluded from Copilot response

Implementing Sensitivity Label Governance

Step 1: Define Label Taxonomy

| Label | Encryption | Access Control | Copilot Behavior | |-------|-----------|----------------|------------------| | Public | No | All users | Accessible to all Copilot users | | Internal | No | All employees | Accessible to internal Copilot users | | Confidential | Yes | Specific groups | Only accessible to authorized group members | | Highly Confidential | Yes | Named individuals | Only accessible to specific users | | Restricted | Yes | Named individuals + Cannot be shared | Blocked from Copilot entirely (via DLP) |

Step 2: Create Encrypted Labels

# Create "Confidential - Finance Only" label with encryption
Connect-IPPSSession -UserPrincipalName admin@contoso.com

$labelConfig = @{
    DisplayName = "Confidential - Finance Only"
    Name = "ConfidentialFinance"
    Tooltip = "Financial data restricted to Finance team and executives"
    EncryptionEnabled = $true
    EncryptionProtectionType = "Template"
    EncryptionDoNotForward = $false
    EncryptionRightsDefinitions = @(
        @{
            Identity = "Finance-Team@contoso.com"
            Rights = @("View", "Edit", "Print", "Copy")
        }
        @{
            Identity = "Executive-Team@contoso.com"
            Rights = @("View", "Edit", "Print", "Copy", "Export")
        }
    )
    EncryptionContentExpiredOnDateInDaysOrNever = "Never"
}

New-Label @labelConfig

# Publish label to users
New-LabelPolicy -Name "Confidential Finance Label Policy" `
    -Labels "ConfidentialFinance" `
    -ExchangeLocation "All" `
    -SharePointLocation "All" `
    -OneDriveLocation "All"

Step 3: Apply Labels to Existing Content

# Auto-label financial documents with "Confidential - Finance Only"
$financeSite = "https://contoso.sharepoint.com/sites/Finance"

Connect-PnPOnline -Url $financeSite -Interactive

$libraries = Get-PnPList | Where-Object { $_.BaseTemplate -eq 101 }

foreach ($library in $libraries) {
    $items = Get-PnPListItem -List $library.Id -PageSize 1000

    foreach ($item in $items) {
        # Check if file contains financial keywords
        $fileName = $item.FieldValues.FileLeafRef
        $financialKeywords = @("budget", "forecast", "revenue", "P&L", "balance sheet", "financial statement")

        $containsFinancialData = $financialKeywords | Where-Object { $fileName -like "*$_*" }

        if ($containsFinancialData) {
            Set-PnPListItem -List $library.Id -Identity $item.Id -Values @{
                "_SensitivityLabel" = "12345678-1234-1234-1234-123456789012"  # Label GUID
            }

            Write-Output "LABELED: $fileName as Confidential - Finance Only"
        }
    }
}

Step 4: Monitor Label Coverage

# Generate report of unlabeled documents in sensitive sites
$sensitiveSites = @(
    "https://contoso.sharepoint.com/sites/Finance",
    "https://contoso.sharepoint.com/sites/Legal",
    "https://contoso.sharepoint.com/sites/Executive"
)

$unlabeledDocs = @()

foreach ($site in $sensitiveSites) {
    Connect-PnPOnline -Url $site -Interactive

    $libraries = Get-PnPList | Where-Object { $_.BaseTemplate -eq 101 }

    foreach ($library in $libraries) {
        $items = Get-PnPListItem -List $library.Id -PageSize 1000

        foreach ($item in $items) {
            if (-not $item.FieldValues._SensitivityLabel) {
                $unlabeledDocs += [PSCustomObject]@{
                    SiteUrl = $site
                    Library = $library.Title
                    FileName = $item.FieldValues.FileLeafRef
                    FilePath = $item.FieldValues.FileRef
                    Modified = $item.FieldValues.Modified
                    ModifiedBy = $item.FieldValues.Editor.LookupValue
                }
            }
        }
    }
}

$unlabeledDocs | Export-Csv -Path "C:\Audit\UnlabeledSensitiveDocs.csv" -NoTypeInformation

Write-Warning "Found $($unlabeledDocs.Count) unlabeled documents in sensitive sites"

Learn more about our Sensitivity Label Implementation service.

DLP Policies to Block Copilot Oversharing

Data Loss Prevention (DLP) policies provide an additional layer of control, blocking Copilot from surfacing content based on sensitivity and context.

DLP Policy Architecture for Copilot

Policy 1: Block Copilot Access to Highly Confidential Content

# Create DLP policy that blocks Copilot from accessing "Highly Confidential" labeled content
New-DlpCompliancePolicy -Name "Block Copilot - Highly Confidential" `
    -SharePointLocation "All" `
    -OneDriveLocation "All" `
    -Mode Enable

New-DlpComplianceRule -Name "Highly Confidential Content" `
    -Policy "Block Copilot - Highly Confidential" `
    -ContentPropertyContainsWords @{
        Property = "_SensitivityLabel"
        Value = "Highly Confidential"
    } `
    -BlockAccess $true `
    -BlockAccessScope "All" `
    -GenerateIncidentReport "DLPAdmin@contoso.com" `
    -NotifyUser "Owner,LastModifier" `
    -NotifyUserType NotSet

Policy 2: Require Justification for Accessing Confidential Content via Copilot

# DLP policy that requires business justification before Copilot retrieves confidential data
New-DlpComplianceRule -Name "Confidential Access Justification" `
    -Policy "Copilot Confidential Access Controls" `
    -ContentPropertyContainsWords @{
        Property = "_SensitivityLabel"
        Value = "Confidential"
    } `
    -BlockAccess $false `
    -NotifyUser "Owner,LastModifier" `
    -NotifyUserType NotSet `
    -NotifyPolicyTipCustomText "This document contains confidential information. Provide business justification for access." `
    -RequireJustification $true `
    -GenerateAlert $true `
    -AlertSeverity High

Policy 3: Block External Sharing of Copilot-Retrieved Content

# Prevent users from sharing documents retrieved via Copilot externally
New-DlpComplianceRule -Name "Block External Sharing from Copilot" `
    -Policy "Copilot Data Exfiltration Prevention" `
    -ContentContainsSensitiveInformation @(
        @{ Name = "Credit Card Number"; MinCount = 1 }
        @{ Name = "U.S. Social Security Number (SSN)"; MinCount = 1 }
        @{ Name = "U.S. Bank Account Number"; MinCount = 1 }
    ) `
    -BlockAccess $true `
    -BlockAccessScope "PerUser" `
    -NotifyAllowOverride "WithJustification" `
    -GenerateIncidentReport "SecurityTeam@contoso.com"

Policy 4: Geo-Fencing for Copilot Access

# Block Copilot access to sensitive data from outside approved geographic locations
New-DlpComplianceRule -Name "Geo-Fence Sensitive Data" `
    -Policy "Copilot Geographic Access Controls" `
    -ContentPropertyContainsWords @{
        Property = "_SensitivityLabel"
        Value = "Confidential"
    } `
    -AccessScope NotInOrganization `
    -BlockAccess $true `
    -Conditions @{
        AccessFromLocation = @{
            AllowedLocations = @("United States", "Canada", "United Kingdom")
            BlockedLocations = @("Russia", "China", "North Korea")
        }
    }

Learn more about our DLP Strategy for Copilot service.

Ongoing Governance: Preventing Future Oversharing

Remediation addresses current oversharing. Governance prevents future issues.

Governance Framework Components

1. Mandatory Sensitivity Labels

Configure Microsoft Purview to require sensitivity labels on all new documents.

# Enforce mandatory labeling for SharePoint and OneDrive
Set-LabelPolicy -Identity "Global Label Policy" `
    -AdvancedSettings @{
        "RequireDocumentLabel" = "True"
        "DisableMandatoryInOutlook" = "False"
    }

2. Automated Access Certification

Quarterly reviews of SharePoint site permissions with automated approval workflows.

# Generate access certification report for site owners
$sites = Get-SPOSite -Limit All

foreach ($site in $sites) {
    $siteUsers = Get-SPOUser -Site $site.Url

    $certificationReport = [PSCustomObject]@{
        SiteUrl = $site.Url
        Title = $site.Title
        Owner = $site.Owner
        TotalUsers = $siteUsers.Count
        LastReviewed = $site.LastContentModifiedDate
        RequiresCertification = if ((Get-Date) - $site.LastContentModifiedDate).Days -gt 90 { "Yes" } else { "No" }
    }

    # Send email to site owner if certification required
    if ($certificationReport.RequiresCertification -eq "Yes") {
        Send-MailMessage -From "governance@contoso.com" -To $site.Owner `
            -Subject "ACTION REQUIRED: Certify SharePoint Site Permissions" `
            -Body "Your site '$($site.Title)' requires quarterly access certification. Review users with access and confirm each user still requires access. Reply to this email to certify." `
            -SmtpServer "smtp.contoso.com"
    }
}

3. Real-Time Alerting for New "Everyone" Grants

# Azure Sentinel KQL query to alert on new "Everyone" permission grants
AuditLogs
| where OperationName == "Add member to group" or OperationName == "Update application"
| extend TargetGroup = tostring(TargetResources[0].displayName)
| extend AddedUser = tostring(TargetResources[0].userPrincipalName)
| where TargetGroup contains "Everyone" or TargetGroup contains "All Company"
| project TimeGenerated, OperationName, TargetGroup, AddedUser, InitiatedBy
| where InitiatedBy != "SharePoint Governance Automation"  // Exclude authorized automation

4. Default Site Creation Templates

Prevent "Everyone" permissions on new sites by configuring secure templates.

# Configure default SharePoint site creation template
$siteTemplate = @{
    Template = "STS#3"
    DefaultSharingLinkType = "Internal"
    SharingCapability = "ExternalUserSharingOnly"
    DefaultLinkPermission = "View"
    ExcludeDefaultGroup = "Everyone"
}

Set-SPOTenant -DefaultSharingLinkType $siteTemplate.DefaultSharingLinkType `
    -SharingCapability $siteTemplate.SharingCapability `
    -DefaultLinkPermission $siteTemplate.DefaultLinkPermission

Learn more about our Copilot Governance Framework service.

Frequently Asked Questions

Why is Copilot surfacing confidential documents to unauthorized users?

Copilot retrieves documents based on SharePoint permissions—if a user has technical read access, Copilot assumes access is authorized. The root cause is typically "Everyone" or "All Company" permissions granted to SharePoint sites, broken permission inheritance where site-level access cascades to all documents, or nested Azure AD group memberships creating transitive permissions users don't realize they have. Copilot doesn't distinguish between "technically accessible" and "intended to access"—it respects permissions literally. Remediation requires permission audits to identify overshared content, removal of "Everyone" groups, and sensitivity labels with encryption to enforce content-level access controls regardless of site permissions.

How do I find all content shared with "Everyone" in my tenant?

Use PowerShell to audit all SharePoint sites: Get-SPOSite -Limit All | ForEach-Object { Get-SPOUser -Site $_.Url | Where-Object { $_.LoginName -like "*Everyone*" } }. This identifies sites where "Everyone" or "All Company" groups have access. For document-level analysis, query each site's document libraries for broken permission inheritance and custom permission grants. The average Fortune 500 tenant has 800+ sites with "Everyone" access and 18,000+ overshared documents. Manual remediation takes 2,400+ hours—automated tools reduce this to 40-80 hours. Export results to CSV for prioritization: oldest sites and largest data volumes represent highest risk. Learn about our Oversharing Assessment service.

Can sensitivity labels block Copilot from accessing specific documents?

Yes, sensitivity labels with encryption provide content-level access controls that override SharePoint permissions. When a document has an encrypted label (e.g., "Confidential - Finance Only") restricting access to specific Azure AD groups, Copilot will only retrieve that document for users in those groups—even if they have read access to the SharePoint site. Implementation requires: (1) creating sensitivity labels with encryption in Microsoft Purview Information Protection; (2) defining access control groups (who can decrypt); (3) applying labels to documents via auto-labeling policies or manual classification; and (4) configuring DLP policies to block Copilot access to highly confidential labels entirely. Label coverage is critical—unlabeled documents revert to SharePoint permissions only.

What's the difference between SharePoint permissions and sensitivity labels for Copilot governance?

SharePoint permissions control who can access sites and libraries (container-level security). Sensitivity labels control who can access and decrypt individual documents (content-level security). For Copilot governance, sensitivity labels are superior because they: (1) travel with the document regardless of storage location; (2) enforce encryption preventing unauthorized access even if SharePoint permissions are misconfigured; (3) provide granular control per document vs. site-wide permissions; and (4) integrate with DLP policies for real-time blocking. However, labels require Microsoft Purview Information Protection (E3+ licensing) and user training for manual labeling. Best practice: use both—SharePoint permissions for initial access control, sensitivity labels for confidential content that requires encryption and explicit authorization.

How long does it take to remediate Copilot oversharing for a large enterprise?

For a typical Fortune 500 organization (10,000-50,000 users, 5,000-15,000 SharePoint sites), expect 12-16 weeks for comprehensive remediation: 2-3 weeks for permission auditing and risk assessment; 4-6 weeks for "Everyone" permission removal and security group restructuring; 3-4 weeks for sensitivity label deployment and auto-labeling configuration; 2-3 weeks for DLP policy implementation and testing; 1-2 weeks for governance framework and ongoing monitoring setup. Organizations with severe permission sprawl (20,000+ sites, decentralized management) may require 20-24 weeks. Timeline depends on permission complexity, change management velocity, and business unit cooperation—not technical capability. Parallel workstreams (permissions, labels, DLP) can compress timeline to 10-12 weeks with dedicated resources.

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Microsoft Copilot Oversharing: How to Prevent Sensitive Data Exposure

What is Copilot Oversharing?

The "Everyone" Problem

Broken Permission Inheritance

Nested Group Membership

Identifying Overshared Content: Technical Assessment

Step 1: Audit All SharePoint Sites with "Everyone" Permissions

Step 2: Identify Documents with Broken Inheritance

Step 3: Analyze Transitive Permissions via Group Nesting

Step 4: Identify Dormant Accounts with Lingering Access

Remediation Strategies: Removing Excessive Permissions

Strategy 1: Remove "Everyone" Permissions

Strategy 2: Replace "Everyone" with Specific Security Groups

Strategy 3: Implement Time-Bound Access Grants

Preventing Oversharing with Sensitivity Labels

How Sensitivity Labels Block Copilot Access

Implementing Sensitivity Label Governance

DLP Policies to Block Copilot Oversharing

DLP Policy Architecture for Copilot

Ongoing Governance: Preventing Future Oversharing

Governance Framework Components

Frequently Asked Questions

Why is Copilot surfacing confidential documents to unauthorized users?

How do I find all content shared with "Everyone" in my tenant?

Can sensitivity labels block Copilot from accessing specific documents?

What's the difference between SharePoint permissions and sensitivity labels for Copilot governance?

How long does it take to remediate Copilot oversharing for a large enterprise?

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