Microsoft now blocks Copilot from reading labeled Office files
Reviewed by Helen Jones
Microsoft extended the 'Prevent some connected experiences that analyze content' sensitivity label setting to Word, Excel, and PowerPoint files. Files carrying this label no longer send content to Copilot or other Microsoft connected services. The change is controlled through PowerShell as an advanced label property and applies only to files that already carry the label. Organizations must set the property themselves. The update gives companies a way to keep specific documents out of Copilot without removing the licence entirely.
Until now most teams treated sensitivity labels as a compliance checkbox that rarely touched day-to-day Copilot use. Files stayed readable by Copilot unless an admin turned the tool off for everyone. The new rule means any file that receives the label becomes invisible to Copilot by default. Teams that have not decided which documents should carry the label will discover work blocked without notice when the next label sweep runs.
Analysis
Treat this as a labeling policy problem, not a Copilot problem. Identify the three document types your team opens most often in Word, Excel, and PowerPoint, then decide in writing whether each type should carry the blocking label before the next compliance pass hides them from Copilot.
Source note
Pulse published by Collab365 Spaces, reviewed by Helen Jones on . Cite as "Microsoft now blocks Copilot from reading labeled Office files", Collab365 Spaces. 1 source referenced.