Quick Answer
The answer is auto-labeling policies in Microsoft Purview. This solution is correct because it automatically detects sensitive data types, such as Social Security numbers, using built-in or custom sensitive information types and then applies the appropriate sensitivity labels to documents in SharePoint Online without requiring any user intervention, directly meeting the compliance team’s need for automated detection and labeling. On the Microsoft Cybersecurity Architect exam, this scenario tests your understanding of how Purview’s auto-labeling differs from manual or default labeling policies—a common trap is confusing it with retention labels or DLP policies, which do not apply sensitivity labels. Remember: if the requirement is to automatically detect and label data at rest in SharePoint, think “auto-labeling policies.” A useful memory tip is “Auto for At-rest”—auto-labeling handles data already stored, while DLP focuses on data in motion.
This SC-100 practice question tests your understanding of design solutions that align with security best practices and priorities. 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.
Your organization is migrating to Microsoft 365 and wants to implement a data classification strategy. The compliance team needs to automatically detect and label documents containing personal data (e.g., Social Security numbers) in SharePoint Online. Which Microsoft Purview solution should you use?
Auto-labeling policies
Auto-labeling uses sensitive info types to automatically apply labels.
Records Management
Why wrong: Records Management manages retention, not classification.
eDiscovery
Why wrong: eDiscovery finds content but doesn't apply labels automatically.
Data Loss Prevention policies
Why wrong: DLP policies act on labeled data, they don't automatically classify.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Auto-labeling policies
Auto-labeling policies in Microsoft Purview are designed to automatically detect sensitive data types (e.g., Social Security numbers) using built-in or custom sensitive information types and apply sensitivity labels to documents in SharePoint Online. This meets the requirement for automatic detection and labeling without user intervention, as the compliance team needs.
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.
Auto-labeling policies
Why this is correct
Auto-labeling uses sensitive info types to automatically apply labels.
Related concept
Read the scenario before looking for a memorised answer.
Records Management
Why it's wrong here
Records Management manages retention, not classification.
eDiscovery
Why it's wrong here
eDiscovery finds content but doesn't apply labels automatically.
Data Loss Prevention policies
Why it's wrong here
DLP policies act on labeled data, they don't automatically classify.
Common exam traps
The trap here is confusing Data Loss Prevention (DLP) policies with auto-labeling policies, as both can detect sensitive data, but DLP policies enforce protective actions (block/alert) while auto-labeling policies apply sensitivity labels for classification and downstream protection.
Detailed technical explanation
Auto-labeling policies leverage the Microsoft 365 unified labeling platform and can be configured to run in simulation mode first to test detection accuracy before enforcing labeling. Under the hood, they use the same sensitive information types and exact data match (EDM) classifiers as DLP, but the action is to apply a sensitivity label rather than enforce a protection rule. A subtle behavior is that auto-labeling for SharePoint Online applies labels to documents at rest, while client-side auto-labeling (e.g., in Word) applies labels during content creation.
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
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FAQ
Design solutions that align with security best practices and priorities — This question tests Design solutions that align with security best practices and priorities — Read the scenario before looking for a memorised answer..
The correct answer is: Auto-labeling policies — Auto-labeling policies in Microsoft Purview are designed to automatically detect sensitive data types (e.g., Social Security numbers) using built-in or custom sensitive information types and apply sensitivity labels to documents in SharePoint Online. This meets the requirement for automatic detection and labeling without user intervention, as the compliance team needs.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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. Your company uses Microsoft Purview to classify and label sensitive data. The data protection team needs to automatically apply a 'Confidential' label to documents that contain a custom sensitive info type for employee IDs. Which should you create?
mediumWhy D: To automatically apply a 'Confidential' label based on the presence of a custom sensitive info type (employee IDs), you need both a custom sensitive information type (SIT) to define the pattern and an auto-labeling policy to trigger the label application. The auto-labeling policy uses the SIT to scan documents and automatically applies the specified sensitivity label when a match is found. This is the only option that combines the detection mechanism with automated labeling.
Variation 2. Your organization uses Microsoft Purview Information Protection to classify and protect sensitive data. The compliance team wants to automatically apply a 'Highly Confidential' sensitivity label to emails that contain credit card numbers. Which solution should you configure?
hardWhy A: Option C is correct because Microsoft Purview auto-labeling policies can automatically apply sensitivity labels based on sensitive information types like credit card numbers. Option A is wrong because Microsoft 365 DLP policies block or warn, not apply labels. Option B is wrong because endpoint DLP protects data on devices, not email. Option D is wrong because Microsoft Defender for Office 365 protects against threats, not data classification.
Last reviewed: Jun 24, 2026
This SC-100 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the SC-100 exam.
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