How to Use Information Barriers to Block Communication Between Departments in Microsoft Teams

How to Block Communication Between Departments in Microsoft Teams Using Information Barriers

In some organizations, certain teams must not communicate with others due to compliance or regulatory requirements. For example, a trading department and a research department may need strict separation to prevent conflicts of interest. With a Microsoft 365 E5 subscription, you can use Information Barriers (IB) to enforce this separation within Microsoft Teams, SharePoint, and other Microsoft 365 apps. This guide walks you through the exact steps—in the right order—to set it up, including prerequisites and verification.

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Prerequisites

• A Microsoft 365 E5 or equivalent license that includes Information Barriers.
• Global Administrator and Compliance Administrator roles in Microsoft Entra ID.
• PowerShell modules:
  • Install the AzureAD module: powershellInstall-Module AzureAD
  • Install the InformationProtection module (for IB cmdlets): powershellInstall-Module ExchangeOnlineManagement Import-Module ExchangeOnlineManagement
  • Connect to services: powershellConnect-AzureAD Connect-ExchangeOnline -UserPrincipalName youradmin@contoso.com

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✅ Step 1: Grant Admin Consent for the Information Barrier Processor

Before using Information Barriers, allow the Information Barrier Processor app to work with your tenant. This processor ensures policies apply consistently across Microsoft 365 services.

1. Sign in to the Microsoft Entra admin center as a Global Administrator.
2. Navigate to Enterprise applications.
3. Locate Information Barrier Processor and select Grant admin consent.

Once complete, your tenant can enforce IB policies.

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✅ Step 2: Enable Scoped Directory Search in Teams

Ensure Teams respects IB rules when users search for or try to communicate with others.

1. Open the Microsoft Teams admin center.
2. Go to Org-wide settings → Teams settings.
3. Toggle Scoped directory search to On.

This limits directory visibility per your IB policies.

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✅ Step 3: Define User Segments

Create segments based on attributes like department or custom Azure AD properties. Here, we’ll make two segments: Trading and Research.

Use PowerShell to define segments:

powershell# Trading segment
New-InformationBarrierSegment `
  -Name "Trading" `
  -Filter "Department -eq 'Trading'"

# Research segment
New-InformationBarrierSegment `
  -Name "Research" `
  -Filter "Department -eq 'Research'"

Segments group users so policies can reference them.

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✅ Step 4: Create and Apply Information Barrier Policies

Define which segments can—and cannot—communicate. We’ll block Trading from Research and vice versa.

powershell# Block Trading → Research
New-InformationBarrierPolicy `
  -Name "Trading cannot communicate with Research" `
  -AssignedSegment "Trading" `
  -SegmentsBlocked "Research" `
  -State Active

# Block Research → Trading
New-InformationBarrierPolicy `
  -Name "Research cannot communicate with Trading" `
  -AssignedSegment "Research" `
  -SegmentsBlocked "Trading" `
  -State Active

# Apply policies
Start-InformationBarrierPoliciesApplication

Policies take several hours to propagate across Teams, SharePoint, and other services.

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✅ Step 5: Verify Policy Application

After a few hours, confirm that IB is in effect:

1. In the Teams client, attempt to start a chat or call between a Trading user and a Research user. Messaging should be blocked.
2. In SharePoint, try to share a document between sites owned by each segment—sharing options for blocked segments shouldn’t appear.
3. Use PowerShell to check policy status: powershellGet-InformationBarrierPolicy | Format-Table Name,State Both policies should be listed and State set to Active.

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🔒 Summary

Step	Action
1	Grant admin consent for the Information Barrier Processor
2	Enable scoped directory search in Teams
3	Define user segments (Trading, Research)
4	Create and apply Information Barrier policies
5	Verify policies in Teams, SharePoint, and via PowerShell

Information Barriers help maintain compliance and ethical boundaries within organizations. By following these steps—including prerequisites and verification—you can prevent unauthorized communication between sensitive departments across Microsoft 365.