The answer is Microsoft Purview Data Loss Prevention (DLP). DLP is the correct choice because it can automatically scan SharePoint Online documents for sensitive information types like social security numbers, and when PII is detected, its policies can trigger the action to apply a sensitivity label that encrypts the document and restricts access to only the compliance team. This scenario tests your understanding of how DLP policies integrate with sensitivity labels to enforce protection based on content detection, a key concept for the SC-900 exam. A common trap is confusing DLP with Microsoft Purview Information Protection alone, but remember that DLP provides the detection engine that drives the automatic labeling action. For the exam, focus on the workflow: DLP detects the sensitive data, then applies the label—not the other way around. A helpful memory tip is “DLP detects, label protects.”
SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions
This SC-900 practice question tests your understanding of describe the capabilities of microsoft compliance solutions. 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.
A company uses Microsoft 365 and needs to automatically detect documents in SharePoint Online that contain personally identifiable information (PII) such as social security numbers. When such documents are detected, they want to apply a sensitivity label that encrypts the document and restricts access to only the compliance team. Which Microsoft Purview solution should they use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Data Loss Prevention (DLP)
Microsoft Purview Data Loss Prevention (DLP) is the correct solution because it can automatically scan documents in SharePoint Online for sensitive information types (e.g., social security numbers) using built-in or custom sensitive info types. When a match is found, DLP policies can trigger an action to apply a sensitivity label that encrypts the document and restricts access, such as limiting it to the compliance team. This combines content detection with automated protection, which is exactly the scenario described.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Data Lifecycle Management
Why it's wrong here
Data Lifecycle Management is for retention and deletion policies, not for automatically detecting and protecting sensitive content.
✗
Records Management
Why it's wrong here
Records Management is for declaring items as records to prevent deletion, not for detecting PII or applying encryption.
✓
Data Loss Prevention (DLP)
Why this is correct
Correct. DLP policies can detect sensitive information and enforce actions like applying encryption or restricting access.
Related concept
Read the scenario before looking for a memorised answer.
✗
Communication Compliance
Why it's wrong here
Communication Compliance is for monitoring communications (email, Teams) for policy violations, not for scanning documents in SharePoint.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse DLP with Data Lifecycle Management or Records Management, thinking those solutions handle content classification, but DLP is the only one that combines real-time content inspection with automated label application for protection.
Detailed technical explanation
How to think about this question
Under the hood, DLP policies in SharePoint Online use the Microsoft 365 classification engine to evaluate content against sensitive information types defined in the Compliance Center. When a DLP rule matches, it can invoke a 'sensitivity label' action that applies encryption and access control via Azure Information Protection (AIP) rights management. A real-world nuance: DLP can also be configured to send email notifications or block sharing, but the label action is the only way to enforce persistent encryption on the document itself.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
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
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this SC-900 question in full detail.
Describe the capabilities of Microsoft compliance solutions — This question tests Describe the capabilities of Microsoft compliance solutions — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Data Loss Prevention (DLP) — Microsoft Purview Data Loss Prevention (DLP) is the correct solution because it can automatically scan documents in SharePoint Online for sensitive information types (e.g., social security numbers) using built-in or custom sensitive info types. When a match is found, DLP policies can trigger an action to apply a sensitivity label that encrypts the document and restricts access, such as limiting it to the compliance team. This combines content detection with automated protection, which is exactly the scenario described.
What should I do if I get this SC-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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