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External Sharing Limitation on Microsoft Office 365 OneDrive

When an Office 356 administrator allows sharing with external users that already exist in the organization's directory, these users are treated by Microsoft as internal users from an API standpoint. So file sharing with these users will not trigger a policy violation with external users. If you want to track activities for all external users (whether in your organization's directory or not), you have to change the sharing permissions to New and existing external users - External users must sign in. To do so:

  1. Go to the Office 365 page (https://login.microsoftonline.com) and login to your admin account.

  2. Under Apps, click OneDrive.

  3. On the left navigate pane, click OneDrive admin.

    The OneDrive admin center page opens.

  4. On the left navigation pane, click Sharing.

  5. Under the External sharing section, set the OneDrive sharing to New and existing external users.

  6. Click Save.