A customer of mine would like to block file sharing in MS Teams ( both on 1:1 as well as teams group chat ) . While removing the SPO license on the user's profile stops the user from sharing files on a 1:1 chat , the user is still able to upload files in the teams group chat and the files can be viewed in the "Files" tab . Any idea how to stop the user from sharing files on a teams group chat ? The customer doesn't want any file sharing happening on Teams and this is on an Office 365 enterprise SKU tenant .
If you block users from creating teams, then create one team for them where they can't create new channels and change the file permissions it could work. You have to change the permissions in SharePoint.
As you understand this won't be a good user experience, so maybe your customer have to rethink and see the possibilities with files in channels. Where do they share files today?