SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions
A multinational company uses Microsoft 365 and has a retention policy that automatically applies a 7-year retention label to any document containing a credit card number. The retention label must be automatically applied at the time the document is created or modified. Which Microsoft Purview solution should the administrator use to configure this automatic labeling rule?
⚠ Common exam trap
It's easy for candidates to confuse 'Retention Policy' (which applies at the container level) with 'Retention Labels' (which can be auto-applied at the item level), leading them to select Option B, but the question specifically requires automatic labeling based on content, which only Data Lifecycle Management supports.
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
✓
Microsoft Purview Data Lifecycle Management
Microsoft Purview Data Lifecycle Management (formerly known as Microsoft 365 Records Management) is the correct solution because it provides the ability to create and apply retention labels automatically based on sensitive information types, such as credit card numbers, using auto-labeling policies. This ensures that the retention label is applied at the time of document creation or modification, meeting the requirement for automatic application without user intervention.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Microsoft Purview Data Lifecycle Management
Why this is correct
Microsoft Purview Data Lifecycle Management is the correct service for managing data retention and deletion across an organization, offering retention labels that can be manually applied or, crucially, automatically applied via auto-labeling policies. These policies leverage conditions like sensitive information types, keywords, or trainable classifiers to ensure content-specific retention actions are taken without manual intervention. This directly addresses the need for content-based automatic retention.
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Microsoft Purview Retention Policy
Why it's wrong here
Microsoft Purview Retention Policies are designed to apply retention settings broadly to entire locations, such as all Exchange mailboxes, all SharePoint sites, or specific Microsoft 365 Groups. While effective for blanket retention across a service, they lack the granular capability to automatically identify and apply different retention actions based on the specific content within individual items, like documents or emails. Therefore, they cannot fulfill a requirement for content-based automatic labeling.
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Microsoft Purview Sensitivity Labels
Why it's wrong here
Microsoft Purview Sensitivity Labels are primarily used for classifying data and applying protective actions like encryption, visual markings (headers/footers), and access restrictions. While they can be automatically applied based on content, their core function is information protection, not data retention or deletion. Although a sensitivity label can trigger a retention label to be applied, sensitivity labels themselves do not define retention periods or actions, making them unsuitable as the direct solution for content-based automatic retention.
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Microsoft Purview eDiscovery
Why it's wrong here
Microsoft Purview eDiscovery tools are designed for identifying, preserving, collecting, processing, reviewing, and analyzing electronically stored information (ESI) for legal or investigative matters. While eDiscovery can place content on legal hold to prevent deletion, its purpose is reactive investigation and preservation, not proactive, automated application of retention labels based on content analysis for ongoing data lifecycle management. It does not provide the mechanisms for automatically applying retention labels.
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Microsoft Entra ID
Key term
Labels
Labels are descriptive text or tags attached to IT resources to organize, identify, and manage them based on attributes like purpose, environment, or owner.
Key term
Retention policy
A retention policy is a set of rules that determines how long an organization keeps its data and what happens to it when the retention period expires.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.