SharePoint Online is a powerful document management and collaboration platform, but organizations must ensure they comply with industry regulations, data protection laws, and corporate policies. Microsoft 365 provides several compliance tools within SharePoint Online, Microsoft Purview (Compliance Center), and Security & Compliance features to help businesses manage legal and regulatory requirements effectively.
This guide covers key compliance considerations, legal obligations, and best practices for ensuring a secure and compliant SharePoint Online environment.
1. Understanding Compliance in SharePoint Online
Compliance in SharePoint Online refers to the ability to store, manage, protect, and retrieve data while meeting regulatory requirements such as:
- GDPR (General Data Protection Regulation) – Protects personal data of EU citizens.
- HIPAA (Health Insurance Portability and Accountability Act) – Applies to healthcare and patient data security.
- ISO 27001 & SOC 2 – Industry standards for security and compliance.
- FINRA & SEC Regulations – Compliance requirements for financial institutions.
- eDiscovery & Legal Hold – Required for litigation and legal case management.
Microsoft’s Role: Provides security and compliance tools within Microsoft Purview Compliance Center to help organizations meet these regulations.
Your Role: Implement policies, access controls, and compliance tools to protect sensitive data in SharePoint Online.
2. Key Compliance Features in SharePoint Online
1. Data Loss Prevention (DLP) Policies
Best for: Preventing unauthorized sharing of sensitive information.
How to Enable DLP in SharePoint Online:
- Go to Microsoft Purview Compliance Center → Data Loss Prevention.
- Click Create a DLP policy → Choose a template (e.g., GDPR, HIPAA).
- Select SharePoint and OneDrive as locations.
- Configure sensitive data types (e.g., credit card numbers, social security numbers).
- Set actions (e.g., block sharing, send alerts).
- Save and apply the policy.
Benefit: Prevents accidental or malicious data leaks by blocking sensitive content sharing.
2. Information Protection & Sensitivity Labels
Best for: Classifying and protecting documents with encryption, access restrictions, and watermarks.
How to Apply Sensitivity Labels in SharePoint Online:
- Go to Microsoft Purview Compliance Center → Information Protection.
- Click Create a label → Choose Confidential, Internal, or Public.
- Configure encryption settings, watermarking, and access control.
- Publish the label to SharePoint Online.
- Users can apply labels manually, or automatically using content rules.
Benefit: Ensures sensitive documents are encrypted and access-restricted to prevent data breaches.
3. Retention Policies & Records Management
Best for: Compliance with data retention laws and preventing premature deletion of important records.
How to Set Retention Policies:
- Go to Microsoft Purview Compliance Center → Data Lifecycle Management.
- Click Retention Policies → Create a Policy.
- Select SharePoint sites or OneDrive as target locations.
- Set retention rules (e.g., keep files for 7 years before deletion).
- Apply the policy to prevent accidental or intentional deletions.
Benefit: Helps organizations comply with legal data retention laws and automates document lifecycle management.
4. eDiscovery and Legal Hold
Best for: Finding and preserving SharePoint data for legal investigations and compliance audits.
How to Use eDiscovery in SharePoint Online:
- Go to Microsoft Purview Compliance Center → eDiscovery.
- Click Create a Case → Define the scope (SharePoint sites, OneDrive).
- Set up search queries (keywords, date range, user-specific content).
- Export search results for legal review.
- If needed, apply a Legal Hold to prevent data from being deleted.
Benefit: Ensures legal teams can retrieve relevant SharePoint data for lawsuits or investigations.
5. Audit Logging & Compliance Reports
Best for: Monitoring user activities to detect unauthorized access or compliance violations.
How to Enable SharePoint Online Audit Logs:
- Go to Microsoft Purview Compliance Center → Audit.
- Click Search Audit Log → Choose SharePoint as a source.
- Apply filters (file access, user actions, data modifications).
- View and download logs for compliance audits.
Benefit: Helps organizations track who accessed, modified, or shared sensitive data in SharePoint Online.
6. Secure External Sharing & Guest Access Management
Best for: Controlling how external users access SharePoint Online content.
How to Restrict External Sharing:
- Go to Microsoft 365 Admin Center → SharePoint Admin Center.
- Click Policies → Sharing.
- Select the appropriate setting:
- Only people in your organization (most restrictive).
- New and existing guests (allows external collaboration).
- Anyone with the link (least secure).
- Set expiration dates and password-protected links.
Benefit: Prevents data leaks and unauthorized access by limiting external file sharing permissions.
7. Microsoft Defender for Cloud Apps (CASB) for SharePoint
Best for: Detecting insider threats, unauthorized file sharing, and security risks.
How to Enable Defender for SharePoint Online:
- Go to Microsoft Defender for Cloud Apps portal.
- Click Cloud Discovery → Enable monitoring for SharePoint Online.
- Set alerts for suspicious activities (e.g., mass downloads, unusual file access).
- Integrate with Azure AD Conditional Access to enforce security policies.
Benefit: Helps organizations detect and prevent data breaches, insider threats, and shadow IT risks.
3. Best Practices for Ensuring SharePoint Online Compliance
✔ Enable Multi-Factor Authentication (MFA) to prevent unauthorized access.
✔ Regularly review permissions and remove inactive users from SharePoint sites.
✔ Classify documents using Sensitivity Labels for access control.
✔ Use Retention Policies to manage data lifecycle and prevent premature deletions.
✔ Conduct regular compliance audits using SharePoint audit logs.
✔ Train employees on data protection and secure collaboration best practices.