OneDrive: Retention enforcement for unlicensed OneDrive accounts

Updated June 12, 2026: We have updated the timeline. Thank you for your patience.  What and Why: We’re updating how unlicensed OneDrive accounts are retained to help organizations manage storage more predictably and reduce long-term unmanaged data. This update introduces enforced lifecycle stages for unlicensed OneDrive accounts that remain unpaid for an extended period, ensuring clearer storage governance while giving admins multiple options to preserve data when needed. Rollout Schedule: General Availability (Worldwide): This policy change will be implemented starting early July 2026 and introduces a lifecycle with staged enforcement actions and built‑in time for admins to take action before restrictions apply. Starting July 2027, unlicensed ODBs that remain unpaid will be at risk of being deleted. Impact on Your Organization: Who is affected: Tenants with unlicensed OneDrive accounts created after license removal or user deletion. Platforms / Services: OneDrive for Business SharePoint Online What will happen: Day 60: Unlicensed OneDrive becomes read-only. Day 93: OneDrive is archived:Users cannot access the content directly. Content remains available for eDiscovery and legal holds. Up to 12 cumulative months of non‑payment:If the account remains unpaid and no action is taken, the OneDrive data is at risk of being deleted. If a license is reassigned or billing is enabled before deletion, the OneDrive exits retention enforcement and resumes normal behavior. This change is on by default and does not require tenant opt‑in. Action Required / Recommendations: Admins should review unlicensed OneDrive accounts and take one or more of the following actions as appropriate: Reassign a OneDrive license to the user. Enable pay‑as‑you‑go billing for:Unlicensed OneDrive archive storage, or Unlicensed OneDrive standard storage. Migrate content to another OneDrive or SharePoint location. Adjust retention policies so data is deleted when no longer required. Take no action if the data is no longer needed and can be deleted after the 365th unlicensed day. Review the following Learn article: Manage unlicensed OneDrive user accounts - SharePoint in Microsoft 365 | Microsoft Learn No action is required if appropriate licensing, billing, or retention settings are already in place. Compliance considerations: Area Explanation Retention policies, holds, or deletion workflows Unlicensed OneDrive accounts that remain unpaid for an extended period may be deleted even if retention policies or legal holds are configured, unless licensing or billing is restored. eDiscovery or Content Search Archived unlicensed OneDrive content remains available for eDiscovery and legal holds until the data is permanently deleted. How customer data is stored or deleted The change introduces enforced lifecycle stages and permanent deletion timelines for unpaid, unlicensed OneDrive data. User access, export, or deletion of personal data (GDPR) User access to unlicensed OneDrive content is restricted once accounts become read-only or archived, which may affect how personal data can be accessed or exported prior to deletion.