Microsoft 365 Copilot not showing up as location in DLP

Mpangwin1 

This isn’t an E3 vs E5 issue on its own.

Microsoft Purview has two separate DLP capabilities for Copilot, with different requirements:

• DLP for Copilot prompts (blocking sensitive data in prompts) is available to all licence tiers (E1/E3/E5) for tenants with access to Copilot and Copilot Chat.
• DLP to prevent Copilot from processing files and emails based on sensitivity labels does require E5 (or E5 Compliance add-on).

Because of this, an E3 tenant can legitimately see the Microsoft 365 Copilot location when creating a custom DLP policy, depending on what capability is enabled.

More info Microsoft Purview service description - Service Descriptions | Microsoft Learn. So this should not be an issue.

If the Copilot location is missing despite using the Custom template, the most common causes are:

1. RBAC – only specific roles (for example Purview Data Security AI Admin or Entra AI Admin) can configure DLP for Copilot; without these, the location may not appear. Check the roles here Learn about using Microsoft Purview Data Loss Prevention to protect interactions with Microsoft 365 Copilot and Copilot Chat | Microsoft Learn
2. Tenant rollout/flighting – Copilot DLP has been gradually rolled out, and availability can still differ between tenants, even with identical licensing.

Licensing alone doesn’t explain the behaviour you’re seeing; I’d validate roles first, then assume tenant-level rollout variance.