The answer is a sensitivity label and an auto-labeling policy (often referred to as a DLP policy for auto-labeling). This combination works because the sensitivity label defines the encryption and protection settings—such as marking documents as 'Highly Confidential'—while the auto-labeling policy detects sensitive info types like credit card numbers in SharePoint and applies the label automatically without user interaction. On the MS-102 exam, this scenario tests your understanding of how Microsoft Purview integrates Information Protection with Data Loss Prevention; a common trap is confusing manual sensitivity labels with auto-labeling policies, or forgetting that the DLP policy triggers the automatic application. Remember the pairing: the label provides the "what" (encryption), and the auto-labeling policy provides the "when" (detection of credit card data). A useful memory tip is "Label locks it, DLP detects it."
MS-102 Manage compliance by using Microsoft Purview Practice Question
This MS-102 practice question tests your understanding of manage compliance by using microsoft purview. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. A key principle to apply: sensitivity labels define encryption, visual markings, and access permissions.. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A compliance officer needs to automatically apply a 'Highly Confidential' sensitivity label that encrypts documents in SharePoint Online when they contain credit card numbers. The labeling must happen automatically without user interaction. Which two Microsoft Purview components must be configured? (Select the option that correctly identifies both required components.)
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Sensitivity label and auto-labeling policy
To automatically apply a 'Highly Confidential' sensitivity label that encrypts documents in SharePoint Online when credit card numbers are detected, you must configure both a sensitivity label (which defines the encryption and protection settings) and an auto-labeling policy (which specifies the conditions, such as sensitive info types like credit card numbers, and triggers automatic labeling without user interaction). The auto-labeling policy applies the sensitivity label to documents that match the defined rules, enabling automated enforcement.
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Sensitivity label and auto-labeling policy
Why this is correct
The sensitivity label defines encryption; the auto-labeling policy scans content and applies the label automatically.
Related concept
Sensitivity labels define encryption, visual markings, and access permissions.
✗
DLP policy and retention label
Why it's wrong here
DLP policies can block or monitor but do not apply sensitivity labels. Retention labels do not provide encryption.
✓
Sensitivity label and DLP policy
Why this is correct
DLP policies do not automatically apply sensitivity labels; they enforce separate actions.
Related concept
Sensitivity labels define encryption, visual markings, and access permissions.
✗
Auto-labeling policy and retention label
Why it's wrong here
Retention labels do not encrypt content, and auto-labeling policy alone cannot apply a label without a defined sensitivity label.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse DLP policies (which only detect and act on data in motion or at rest without applying labels) with auto-labeling policies, or they forget that a sensitivity label must be configured first to define the encryption, leading them to select option C incorrectly.
Detailed technical explanation
How to think about this question
Auto-labeling policies in Microsoft Purview use the same sensitive info types (e.g., credit card numbers via regex patterns) as DLP, but they apply sensitivity labels directly to documents at rest in SharePoint Online via the Microsoft 365 unified labeling client. The sensitivity label must be published and configured with encryption (e.g., using Azure Rights Management) before the auto-labeling policy can reference it; the policy runs as a background process, scanning existing and new documents without user prompts.
KKey Concepts to Remember
Sensitivity labels define encryption, visual markings, and access permissions.
Auto-labeling policies automatically apply sensitivity labels based on content.
Auto-labeling policies use sensitive information types (SITs) to detect content.
DLP policies prevent data loss but do not apply sensitivity labels for encryption.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Sensitivity labels define encryption, visual markings, and access permissions.
Real-world example
How this comes up in practice
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Sensitivity labels define encryption, visual markings, and access permissions. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this MS-102 question in full detail.
Review sensitivity labels define encryption, visual markings, and access permissions., then practise related MS-102 questions on the same topic to reinforce the concept.
Manage compliance by using Microsoft Purview — This question tests Manage compliance by using Microsoft Purview — Sensitivity labels define encryption, visual markings, and access permissions..
What is the correct answer to this question?
The correct answer is: Sensitivity label and auto-labeling policy — To automatically apply a 'Highly Confidential' sensitivity label that encrypts documents in SharePoint Online when credit card numbers are detected, you must configure both a sensitivity label (which defines the encryption and protection settings) and an auto-labeling policy (which specifies the conditions, such as sensitive info types like credit card numbers, and triggers automatic labeling without user interaction). The auto-labeling policy applies the sensitivity label to documents that match the defined rules, enabling automated enforcement.
What should I do if I get this MS-102 question wrong?
Review sensitivity labels define encryption, visual markings, and access permissions., then practise related MS-102 questions on the same topic to reinforce the concept.
What is the key concept behind this question?
Sensitivity labels define encryption, visual markings, and access permissions.
About these practice questions
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These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A compliance officer wants to automatically apply a 'Confidential' sensitivity label to documents in SharePoint Online that contain credit card numbers. Which two Microsoft Purview features must be configured together? (Choose two.)
easy
✓ A.Data Loss Prevention (DLP) policy
✓ B.Sensitivity label with auto-labeling
C.Retention label policy
D.Microsoft Purview Information Protection scanner
Why A: To automatically apply a 'Confidential' sensitivity label to documents containing credit card numbers in SharePoint Online, you must configure a sensitivity label with auto-labeling (client-side or service-side) to detect the sensitive content, and a Data Loss Prevention (DLP) policy to enforce the labeling action. The DLP policy can be set to automatically apply the sensitivity label when credit card patterns are matched, using the same sensitive info types as auto-labeling. Together, they ensure that content is both classified and protected at rest.
Variation 2. A compliance officer wants to automatically apply a 'Confidential' sensitivity label to documents in SharePoint Online that contain credit card numbers. The label should be applied when the documents are created or modified. Which Microsoft Purview feature should be configured?
medium
✓ A.Create an auto-labeling policy for sensitivity labels
B.Create a retention label policy
C.Create a Data Loss Prevention (DLP) policy
D.Configure a default sensitivity label
Why A: Auto-labeling policies for sensitivity labels in Microsoft Purview can automatically apply a sensitivity label to documents in SharePoint Online based on sensitive information types, such as credit card numbers. This policy scans documents when they are created or modified and applies the label without user intervention, meeting the compliance officer's requirement.
Last reviewed: Jun 11, 2026
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