Microsoft 365 Copilot and professional confidentiality: what is protected and what is not

Many firms already work in Microsoft 365, and Copilot appears in Word, Excel, Outlook and Teams. The question is whether it can be used with client documents. The answer depends on the version, the configuration and what you ask it. This guide is based on Microsoft's public documentation, consulted in November 2026; always check your own contract.

What Microsoft commits to

• No training. Prompts, responses and data accessed through Microsoft Graph are not used to train foundation models (Data, Privacy, and Security for Microsoft Copilot).
• Processor. Enterprise data protection, the Data Protection Addendum and the Product Terms apply to prompts and responses, with Microsoft acting as processor (Enterprise data protection).
• GDPR and EU Data Boundary. Microsoft states that Copilot meets the commitments it already makes to Microsoft 365 commercial customers, including these two.
• Permissions. Copilot only surfaces data the user already has at least view permission for.

The three limits

1. Web search

When web search is on, Copilot generates queries from the prompt and sends them to Bing. Microsoft removes user and tenant identifiers, but those queries follow different rules: Microsoft acts as an independent controller, and the Data Protection Addendum and the EU Data Boundary do not apply (web search documentation). If the prompt contains a client's name, that name may end up in the query. An administrator can turn web search off.

2. Permissions inside the firm

Copilot respects permissions, which means it inherits their mistakes. If a client folder is shared with "everyone", any member of staff may receive that content in a response without having looked for it. Before switching Copilot on, review SharePoint and OneDrive sharing, client by client.

3. Versions and models

The commitments above are those of the work account. Free Copilot with a personal account has other terms. Microsoft also says some models are provided by OpenAI and Anthropic as sub-processors; it is worth knowing which are active in your organisation.

Checklist for the firm

1. Confirm everyone uses Copilot with the work account and the right licence.
2. Decide whether web search stays on and, if so, ban client names and tax numbers in prompts.
3. Review permissions on client folders.
4. Check which models and sub-processors are active.
5. Write the rule into the firm's AI policy.
6. Keep human review of everything that goes to the client.

Where Velado fits

Licensed Copilot handles work inside Microsoft 365 well. Velado is for the rest: when you want another AI, when the prompt needs web search, when the document goes to someone outside, or when the firm has no Copilot licence. It swaps identifiers for codes on your computer, and the answer comes back with the real data. You can try it in the browser and read where the data goes when you use AI.