Copilot and confidential data: Microsoft's defense and the criticism

Microsoft Copilot is an AI assistant that can search and summarize emails, files and conversations at work. That raises a simple question: How do you make sure it doesn't show anything it shouldn't?

Microsoft's promise

According to Microsoft's own documentation, Copilot is built on top of Microsoft 365's identity and access management. Microsoft highlights principles such as strong identity verification, least privilege and continuous evaluation.

Microsoft says Copilot only has access to data that the individual user has permission to see, and that it follows the organization's existing security rules. At the same time, Microsoft acknowledges that overshared or poorly managed content can affect Copilot's answers and increase risk. Companies are referred to SharePoint Advanced Management, among other tools, to fix what is known as oversharing: files being shared with more people than necessary.

For administrators, there is a Copilot security dashboard in the Microsoft 365 admin center, which is generally available. A Security Dashboard for AI, which collects risk signals, is in public preview, and its features may change.

The confidential email bug

According to BleepingComputer, Copilot Chat summarized emails even though they were marked as confidential. The bug was discovered on January 21, 2026. Microsoft logged it as CW1226324.

Microsoft described the problem as affecting content in Sent Items and Drafts in Outlook desktop and attributed it to a code error. Microsoft began rolling out a fix in early February. By February 20, 2026, according to Microsoft, the fix had reached most of the affected environments, and a configuration update had been rolled out globally to enterprise customers. Microsoft maintains that no one gained access to information they weren't already permitted to see. However, Copilot Chat summarized emails with confidentiality labels and bypassed DLP policies, even though Microsoft says the access controls were intact. It has not been disclosed how many users or organizations were affected.

EchoLeak: a reported vulnerability

Researchers at Aim Labs published EchoLeak on June 11, 2025. According to Aim Labs, EchoLeak is a critical zero-click vulnerability in Microsoft 365 Copilot. Microsoft's security center MSRC had received the report before it was made public.

The attack involved sending an email with hidden instructions. According to Aim Labs, it could cause Copilot to leak internal data without any user involvement. According to Microsoft, there are no known cases of it being exploited in the wild.

The advice: clean up first

Security firm Nira, which sells security products, assesses that Copilot amplifies existing permission errors because overshared documents become easier to find. Nira recommends that companies review sharing settings in SharePoint, OneDrive and Teams, use sensitivity labels and train employees before rolling out Copilot.