Microsoft Copilot GDPR and Data Protection: Lack of Transparency and Hosting

Microsoft Copilot GDPR and Data Protection: The Basic Issue

Microsoft Copilot is the AI assistant integrated into Microsoft 365 and Teams. It generates meeting summaries, analyzes content, and creates tasks, pulling data directly from meetings, emails, or documents. While this deep integration brings productivity benefits, it also introduces serious challenges for data protection compliance, especially under GDPR. Why? Much of the processing happens in the background, and parts of it rely on infrastructure located in the United States.

How Microsoft Copilot Works: Behind the Scenes

Copilot is built directly into Microsoft Teams and Office apps. When activated, it analyzes meetings in real time, without any visible bot joining the call or notifying others. Most participants aren’t aware that AI is operating in the background.

The following data may be processed:

• Spoken content (e.g., from Teams meetings)
• Participant names, timestamps, and context
• Email, chat, document, and calendar content

Transparency Issues: Microsoft Copilot as an Invisible Assistant

The lack of visibility when Copilot is active poses a major concern. Since other participants often don’t know it’s running, responsibility falls on users or organizations to provide proper information and obtain necessary permissions.

This may conflict with key GDPR requirements:

• Article 5(1)(a): Fairness, transparency, and accountability
• Article 13: Obligation to inform individuals
• Article 6: Requirement for a lawful processing basis (e.g., consent or legitimate interest)

These issues become especially relevant in external meetings, interviews, or discussions involving sensitive information.

Data Hosting Outside the EU: A Complicating Factor

Microsoft maintains a global cloud infrastructure. While EU customers can activate data boundary options, there’s no absolute guarantee that all Copilot-related processing stays within the EU. Some components, especially those involving OpenAI models, may operate from or route data through US-based systems.

This raises specific concerns:

• US authorities could request access to data under the CLOUD Act.
• The US is not considered a fully safe third country under EU law.
• GDPR requires safeguards such as Standard Contractual Clauses (SCCs)

Microsoft’s DPF certification and robust security policies help, but they may not be sufficient in all contexts.

Microsoft Copilot GDPR and Data Protection: What's Required

To use Microsoft Copilot in a GDPR-compliant way, companies should:

• Inform all participants in advance about Copilot’s use.
• Secure valid consent or ensure another legal basis.
• Legally protect any cross-border data transfers.
• Maintain documentation and assign responsibilities internally.

In practice, however, many organizations lack the awareness or technical insight to consistently apply these measures.

Microsoft Copilot GDPR and Data Protection: Theory vs. Reality

In everyday use, Copilot is often enabled without proper communication. Many users, including external guests or employees, are unaware that their input is being processed. Responsibility lies with the organization using the tool, but it’s often overlooked.

Conclusion: Microsoft Copilot Requires Active Compliance Measures

Microsoft Copilot adds real value to work environments, but it’s not without legal risk. Its background activity and potential data transfers require extra care to meet GDPR standards.

If used, companies should implement internal processes, provide clear notice, and avoid deployment in sensitive meetings unless all participants are aware. Privacy-focused tools like Sally AI, which offer visible participation and EU-only hosting, may offer a more transparent and compliant alternative.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.