- A
Information Barriers
Why wrong: Information Barriers are used to restrict communication and collaboration between certain groups to avoid conflicts of interest, not to manage retention or legal holds.
- B
Data Lifecycle Management with retention labels and eDiscovery holds
Data Lifecycle Management provides retention labels to retain and then delete content, while eDiscovery holds preserve content during litigation, overriding any deletion policies. Together they meet both requirements.
- C
Communication Compliance
Why wrong: Communication Compliance is used to monitor communications for policy violations such as harassment or sensitive information sharing, not for retention or legal holds.
- D
Audit (Premium)
Why wrong: Audit (Premium) provides detailed logging and investigation of activities, but does not enforce retention or preservation of content.
Quick Answer
The answer is Data Lifecycle Management with retention labels and eDiscovery holds. This combination is correct because retention labels, part of Microsoft Purview’s Data Lifecycle Management, allow you to define a retention rule that keeps customer contracts for five years after the contract end date and then automatically deletes them, satisfying the regulatory requirement. Meanwhile, an eDiscovery hold overrides any deletion timelines by preserving all content related to an ongoing lawsuit until the hold is manually released, ensuring legal preservation. On the SC-900 exam, this scenario tests your understanding of how retention labels handle time-based lifecycle rules while eDiscovery holds provide litigation-based exceptions—a common trap is confusing retention labels with retention policies or thinking a single solution can do both. Remember the memory tip: “Labels lock the timeline; holds halt the delete.”
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 comply with a regulatory requirement to retain all customer contracts for 5 years after the contract's end date, after which they must be automatically deleted. Additionally, the legal department needs the ability to preserve all documents related to an ongoing lawsuit, overriding any deletion timelines. Which Microsoft Purview solution should the company use?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Data Lifecycle Management with retention labels and eDiscovery holds
Data Lifecycle Management (DLM) with retention labels allows the company to apply a retention label to customer contracts that retains them for 5 years after the contract end date and then automatically deletes them. eDiscovery holds can be placed on all documents related to an ongoing lawsuit, which overrides any deletion timelines, ensuring that content is preserved until the hold is released. This combination directly meets both the regulatory retention and legal preservation requirements.
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.
- ✗
Information Barriers
Why it's wrong here
Information Barriers are used to restrict communication and collaboration between certain groups to avoid conflicts of interest, not to manage retention or legal holds.
- ✓
Data Lifecycle Management with retention labels and eDiscovery holds
Why this is correct
Data Lifecycle Management provides retention labels to retain and then delete content, while eDiscovery holds preserve content during litigation, overriding any deletion policies. Together they meet both requirements.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Communication Compliance
Why it's wrong here
Communication Compliance is used to monitor communications for policy violations such as harassment or sensitive information sharing, not for retention or legal holds.
- ✗
Audit (Premium)
Why it's wrong here
Audit (Premium) provides detailed logging and investigation of activities, but does not enforce retention or preservation of content.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may confuse eDiscovery holds with retention labels, thinking that retention labels alone can handle legal preservation, but they fail to recognize that eDiscovery holds are required to override deletion timelines for litigation purposes.
Detailed technical explanation
How to think about this question
Retention labels in Microsoft Purview can be configured with a 'retention period' based on a custom date (e.g., contract end date) and an action to delete the item after that period. When an eDiscovery hold is applied to a specific case, it places a legal hold on all content in the specified locations (e.g., SharePoint sites, mailboxes), which takes precedence over any deletion policies, including those from retention labels. This ensures that even if a retention label would normally delete a document, the eDiscovery hold preserves it indefinitely until the hold is released.
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 startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
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FAQ
Questions learners often ask
What does this SC-900 question test?
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 Lifecycle Management with retention labels and eDiscovery holds — Data Lifecycle Management (DLM) with retention labels allows the company to apply a retention label to customer contracts that retains them for 5 years after the contract end date and then automatically deletes them. eDiscovery holds can be placed on all documents related to an ongoing lawsuit, which overrides any deletion timelines, ensuring that content is preserved until the hold is released. This combination directly meets both the regulatory retention and legal preservation requirements.
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.
About these practice questions
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Last reviewed: Jun 11, 2026
This SC-900 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-900 exam.
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