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Microsoft confirmed a Microsoft 365 Copilot Chat bug that caused the Copilot work tab to incorrectly read and summarize users’ emails from Sent Items and Drafts, even when those messages had confidential sensitivity labels and organizations had data loss prevention (DLP) policies intended to prevent such processing. The issue was tracked as admin-visible incident CW1226324, first detected in late January, and was attributed to an unspecified code error that allowed labeled items to be picked up by Copilot despite protections being in place.
Microsoft said it began rolling out a fix in early February and was still monitoring deployment while validating remediation with a subset of affected users; the company did not disclose how many customers were impacted or provide a firm timeline for full resolution. Separate reporting noted heightened institutional concern about built-in AI features handling sensitive correspondence (e.g., the European Parliament IT department blocking AI features on work devices), underscoring governance and data-handling risk when AI assistants can process content contrary to configured controls.
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3 events from the most recent confirmed update back to the earliest known activity.
By February 18, Microsoft said it was monitoring the remediation rollout and contacting a subset of affected users to validate that the issue was resolved. The company did not disclose how many customers were impacted or provide a final remediation timeline.
In early February, Microsoft started deploying a fix for the Copilot Chat bug that incorrectly processed confidential emails. One report specifies the rollout began on February 11, 2026, while Microsoft said deployment was still ongoing as not all affected environments had received it.
Microsoft said it first detected a code error in Microsoft 365 Copilot Chat that allowed the Copilot work tab to read and summarize emails in Sent Items and Drafts despite DLP policies and confidentiality or sensitivity labels. The issue was tracked as advisory CW1226324.
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Microsoft is tightening and clarifying how **Copilot** can access and process user and organizational data across the Microsoft ecosystem. Microsoft is expanding **Purview Data Loss Prevention (DLP)** enforcement so policies that block Copilot from processing restricted/sensitivity-labeled content will apply not only to files in **SharePoint** and **OneDrive**, but also to **locally stored** Word, Excel, and PowerPoint documents. The change is planned for deployment via the *Augmentation Loop (AugLoop)* Office component between late March and late April 2026, and is expected to be automatically enabled for organizations already configured to block Copilot from processing labeled content; Microsoft says the update works by allowing the Office client/AugLoop to read sensitivity labels directly rather than relying on Microsoft Graph calls tied to SharePoint/OneDrive URLs. Separately, a Copilot “Memory” setting labeled **“Microsoft usage data”** has been reported as enabling Copilot to reference data from other Microsoft products (including **Bing, MSN, and Edge**) to personalize conversations, with an option for users to disable it if they have privacy concerns. A third, unrelated Microsoft 365 issue—an acknowledged bug in **classic Outlook** that can cause the mouse pointer to disappear—does not materially relate to Copilot data access or DLP controls and appears to be a usability defect rather than a security event.
Jun 29, 2026
German government CERT advisories reported multiple vulnerabilities affecting **Microsoft 365 Copilot** and **Microsoft 365 Copilot Business Chat**, including flaws that can lead to **information disclosure**. One advisory specifically identified Business Chat as vulnerable to several issues that could expose data, while a later advisory expanded the scope to Microsoft 365 Copilot more broadly. The notices indicate that organizations using Microsoft’s AI-assisted productivity features may face risk from weaknesses in how Copilot components handle or expose information. Security teams should review Microsoft guidance and product-specific remediation for affected Copilot deployments, with particular attention to Business Chat instances where disclosure-related impact was explicitly highlighted.
Jun 29, 2026
Security researchers reported two distinct Microsoft Copilot-related risks: (1) **cross prompt injection** against *Microsoft Copilot* email summarization surfaces that can cause attacker-supplied text in an email to be treated like instructions, shaping the summary into a convincing in-product “security alert” and creating a phishing path that does not rely on attachments or macros; and (2) **audit-logging gaps in Microsoft Copilot Studio** where certain administrative actions for Copilot Studio agents (e.g., around sharing, authentication, logging, and publication) were not consistently recorded in Microsoft 365’s Unified Audit Log, potentially reducing defenders’ ability to detect malicious or unauthorized agent changes. Permiso described how Copilot’s behavior varies across Outlook’s inline *Summarize* experience, the Outlook Copilot pane/add-in, and Teams-based summarization, with the core risk being **trust transfer**—users may treat Copilot output as system-generated even when it is attacker-influenced—and warned that retrieval across Microsoft 365 (Teams/OneDrive/SharePoint) could amplify impact if chained. Datadog Security Labs stated it reported Copilot Studio logging issues to **MSRC**, that Microsoft remediated logging for the affected events by **October 5, 2025**, and that Datadog later observed a **regression** where some events again failed to log consistently, which it also reported to Microsoft.
Jun 29, 2026