SharePoint Online Now Supports Sensitivity Labels for User-Defined Permissions

The latest SharePoint Online update allows labeled documents to be opened and edited in the Office web app.

Published: Mar 03, 2025

Microsoft SharePoint

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Key Takeaways:

  • Microsoft SharePoint Online now supports sensitivity labels with user-defined permissions.
  • User-defined permissions allow users to specify access rights and actions for their content.
  • Documents labeled with user-defined permissions can be opened and edited in Office for the web.

Microsoft is enhancing data security in SharePoint Online by introducing support for sensitivity labels with user-defined permissions, giving organizations greater control over sensitive content. This new feature is currently available in public preview for commercial customers.

What are Microsoft Purview sensitivity labels?

Microsoft Purview sensitivity labels are tools designed to help organizations classify and protect sensitive information. Users can apply these labels to documents and emails in order to ensure that sensitive data is handled appropriately. Sensitivity labels work across various platforms and devices, including Windows, macOS, iOS, and Android.

User-defined permissions in Microsoft Purview allow users to specify who can access their content and what actions they can perform when a sensitivity label is applied. This feature allows users to collaborate securely by defining permissions based on their specific needs.

This new encryption configuration refers to the “Let users assign permissions when they apply the label” setting, which allows users to specify who can access the content and what permissions they have when they apply a sensitivity label to a document or email. Additionally, a checkbox in Office apps (like Word, PowerPoint, and Excel) prompts users to set these permissions when applying a sensitivity label.

“When a document is labeled with user-defined permissions and uploaded to SharePoint or OneDrive, these services can now process the document so that it can be opened and edited in Office for the web, the label name is displayed in the Sensitivity column, and the encrypted file is returned in search results for the label ID,” Microsoft explained.

Limitations

Microsoft notes that sensitivity labels with specific settings are now visible in the Office web app. However, users cannot apply these labels directly in the web versions and will receive a prompt to use an Office desktop app instead. Moreover, content protected by certain sensitivity labels cannot yet be analyzed or reviewed using Microsoft Purview’s search, data loss prevention (DLP), or eDiscovery tools.

To enable AutoSave and co-authoring for files encrypted with sensitivity labels, administrators must activate co-authoring in their Microsoft 365 tenants. On Windows, this feature requires at least version 16.0.16327 from the Current Channel (Preview) or version 16.0.16414 from the Beta Channel. For macOS, users need at least version 16.51 from either the Current Channel (Preview) or the Beta Channel.

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