Quick Answer
The answer is a Microsoft Purview auto-labeling policy. This is the correct choice because auto-labeling policies are specifically designed to automatically apply sensitivity labels to documents at rest in SharePoint Online, scanning content for sensitive data patterns and assigning the appropriate label without requiring user intervention. On the Microsoft 365 Administrator MS-102 exam, this question tests your understanding of how Purview features map to specific compliance tasks—a common trap is confusing auto-labeling with Data Loss Prevention (DLP) policies, which detect and block data but never apply labels, or with retention policies, which manage lifecycle rather than classification. Remember that manual labeling (option B) demands user action, while auto-labeling is fully automated. A useful memory tip: think of auto-labeling as the “sticker machine” that stamps labels on files automatically, whereas DLP is the “security guard” that only watches the door.
This MS-102 practice question tests your understanding of manage compliance by using microsoft purview. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. 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.
You need to ensure that all documents in a SharePoint Online site are automatically labeled with a 'Confidential' sensitivity label. Which Microsoft Purview feature should you use?
Microsoft Purview auto-labeling policy
Auto-labeling automatically applies labels based on conditions.
Microsoft Purview Data Loss Prevention policy
Why wrong: DLP does not apply labels.
Microsoft Purview retention policy
Why wrong: Retention policies do not apply sensitivity labels.
Microsoft Purview manual labeling
Why wrong: Manual labeling requires user action, not automatic.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Microsoft Purview auto-labeling policy
Option C is correct because auto-labeling policies can automatically apply sensitivity labels to documents in SharePoint. Option A is wrong because DLP policies don't apply labels. Option B is wrong because manual labeling requires user action. Option D is wrong because retention policies don't apply sensitivity labels.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Microsoft Purview auto-labeling policy
Why this is correct
Auto-labeling automatically applies labels based on conditions.
Related concept
Read the scenario before looking for a memorised answer.
Microsoft Purview Data Loss Prevention policy
Why it's wrong here
DLP does not apply labels.
Microsoft Purview retention policy
Why it's wrong here
Retention policies do not apply sensitivity labels.
Microsoft Purview manual labeling
Why it's wrong here
Manual labeling requires user action, not automatic.
Common exam traps
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
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. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
What to study next
Identify which MS-102 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Manage compliance by using Microsoft Purview — study guide chapter
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FAQ
Manage compliance by using Microsoft Purview — This question tests Manage compliance by using Microsoft Purview — Read the scenario before looking for a memorised answer..
The correct answer is: Microsoft Purview auto-labeling policy — Option C is correct because auto-labeling policies can automatically apply sensitivity labels to documents in SharePoint. Option A is wrong because DLP policies don't apply labels. Option B is wrong because manual labeling requires user action. Option D is wrong because retention policies don't apply sensitivity labels.
Identify which MS-102 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Read the scenario before looking for a memorised answer.
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Same concept, more angles
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. Which TWO Microsoft Purview solutions are primarily used for data classification?
easyWhy B: Auto-labeling applies labels based on sensitive info types. Sensitivity labels are the classification labels themselves. DLP is for protection. Data Lifecycle Management is for retention. Communication Compliance is for monitoring.
Variation 2. Your company is implementing Microsoft Purview Information Protection to classify and protect sensitive documents. You need to ensure that all documents containing personally identifiable information (PII) are automatically labeled. Which TWO actions should you take? (Select TWO.)
mediumWhy A: Option A is correct because automatic labeling policies can apply sensitivity labels based on sensitive info types. Option D is correct because creating a sensitive info type for PII (e.g., using custom patterns) ensures the policy can detect the data. Option B is wrong because encryption is a protection action, not a labeling requirement. Option C is wrong because manual labeling does not meet the requirement for automatic labeling. Option E is wrong because retention labels are for retention, not classification.
Last reviewed: Jun 21, 2026
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