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Microsoft Fabric Copilot Privacy and Data Security Settings to Review

A practical administrator guide to Microsoft Fabric Copilot privacy: provider access, cross-region processing and storage, capacity geography, permissions, and output review.
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Microsoft Fabric Copilot privacy is not a single on/off choice. Review separate controls for Azure OpenAI, OpenAI-operated models used as a Microsoft subprocessor, cross-region processing, and—in certain Notebook and data-agent experiences—cross-region conversation-history storage. Which settings apply depends on the provider, capacity geography, Fabric experience, and your organization’s requirements.

Start with the provider controls

In the Fabric admin portal, tenant settings distinguish Azure OpenAI from OpenAI-operated models made available as a Microsoft subprocessor. Do not treat one provider’s setting as a proxy for the other: enabling or disabling one does not automatically describe the availability or data handling of the other. Microsoft documents the provider controls and their defaults in its Fabric tenant settings documentation.

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Azure OpenAI-powered features

Review Users can use Copilot and other features powered by Azure OpenAI. Microsoft documents this setting as enabled by default. It can be managed at the tenant level and, where configured, at the capacity level. Copilot-capacity designation is a separate control, also documented as enabled by default. Check both the tenant setting and the capacities that users actually use.

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OpenAI-operated models as a Microsoft subprocessor

Separately review Users can use Copilot, AI Agents and other AI experiences powered by OpenAI as a Microsoft Subprocessor. Microsoft documents this setting as disabled by default. Administrators can scope it to the organization or security groups. Microsoft also documents delegated control for capacity admins when tenant settings allow it, so verify whether a capacity administrator can determine availability within a particular capacity.

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Turning this option off may remove access to some models or features. Assess the effect on the specific Fabric experiences your organization uses rather than assuming the Azure OpenAI control covers them. See Microsoft’s tenant settings documentation and subprocessor information.

Separate cross-region processing from storage

Processing data outside a capacity’s region and storing conversation history outside that region are different decisions. Microsoft documents provider-specific processing controls and a separate storage control for certain conversational experiences. Review the setting name, provider, capacity geography, and experience before enabling any of them.

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Processing outside the capacity region

There are separate settings for allowing Azure OpenAI processing and OpenAI-as-a-Microsoft-subprocessor processing outside the relevant geographic or compliance boundary. Microsoft documents both as disabled by default. Each applies to its corresponding provider when the capacity is outside the US and EU Data Boundary.

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Enabling the applicable option allows processing outside the capacity’s geographic region, compliance boundary, or national cloud instance. Microsoft also notes that the service may run background jobs across boundaries. Treat this as permission for a cross-boundary processing path, not as a claim that every request or all tenant data will be sent abroad. Conversely, do not assume that leaving it disabled means no prompt or grounding context is processed by the selected provider. Confirm the actual capacity location and provider path in Microsoft’s admin settings documentation and subprocessor documentation.

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Cross-region storage for Notebook and data-agent history

A distinct Azure OpenAI storage setting concerns Copilot in Notebooks and Fabric data agents for capacities outside the US and EU Data Boundary. These named experiences can retain conversation history across sessions. Microsoft documents the storage setting as disabled by default; if history is stored and users do not manually clear it, Microsoft says it is stored for 28 days. Users can clear chats themselves.

This is not a universal retention statement for every Fabric Copilot surface. Check whether users access these specific experiences and review the current experience-specific setting in the Fabric admin portal documentation and data-agent settings documentation.

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Check geography, capacity, and availability

Capacity region and SKU can affect both availability and which data controls matter. Microsoft’s Copilot FAQ says trial SKUs are not supported and identifies paid F2-or-higher or P1-or-higher capacity requirements. Microsoft’s Copilot overview says the Azure OpenAI deployment for Fabric Copilot is in US datacenters and the EU Data Boundary; capacities in other geographies may need the relevant cross-region setting enabled.

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Before approving access, map each user group to its capacity, region, SKU, provider setting, and experience. A setting’s default does not establish that Copilot is available on every capacity, nor does the Azure OpenAI deployment description establish where every other provider path or experience processes data.

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Understand what user permissions do—and do not—protect

Copilot access follows Fabric role-level and user-based permissions. Grounding can use schema, relevant data points, and other task context accessible to the authenticated user. Microsoft’s privacy guidance says table contents are not sent unless the user directs Copilot to use them; that qualification is not equivalent to saying no data is processed. Prompts and context used to ground a response are processed as part of the interaction.

A prompt does not grant permission to restricted content. Microsoft’s FAQ states: “If you don’t have permission to access specific data, then prompting Copilot for it won’t retrieve the information.” Review the underlying workspace, item, and data permissions as well as the Copilot settings; access controls remain central to what Copilot can use. See Microsoft’s overview, FAQ, and privacy and security guidance.

Review generated content and organizational commitments

Copilot output can be inaccurate or low quality. Microsoft advises: “Copilot responses can include inaccurate or low-quality content, so make sure to review outputs before you use them in your work.” Establish human review appropriate to the work, especially when generated content informs consequential decisions or is shared outside its original context.

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Microsoft describes service commitments concerning prompts and model training in its official materials. Those product statements do not substitute for checking the terms and obligations that apply to your organization. Before enabling a provider or cross-boundary option, validate the relevant Microsoft terms, contracts, regulatory requirements, and internal data-handling rules. Consult the privacy and security guidance and your organization’s legal or compliance owners.

Administrator review checklist

  1. Inventory capacity: identify each relevant capacity’s region and SKU, and confirm it meets Microsoft’s documented availability requirements.
  2. Review provider access: inspect Azure OpenAI access and OpenAI-as-a-Microsoft-subprocessor access separately; verify tenant, security-group, and delegated capacity scope.
  3. Review cross-region processing: for each provider path, determine whether the applicable setting is needed and whether cross-boundary processing meets organizational requirements.
  4. Review conversation storage: if users work with Copilot in Notebooks or Fabric data agents, check the separate storage control, user chat-clearing expectations, and the documented 28-day history period when history is not manually removed.
  5. Validate permissions and use: confirm users have only the Fabric access appropriate to their work, and set expectations for reviewing generated output.
  6. Recheck current configuration: tenant defaults and product behavior can change. Inspect the live Fabric admin portal and confirm current contractual and regulatory requirements before changing a setting.

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