The correct first step is to create sensitivity labels with auto-labeling policies configured to detect PHI and PII, then publish them via label policies. This approach directly addresses the need for automated classification and protection across Exchange Online, SharePoint Online, and OneDrive for Business because auto-labeling uses built-in sensitive information types to scan content and apply labels without manual intervention, ensuring consistent coverage for HIPAA and GDPR compliance. On the SC-900 exam, this question tests your understanding of how Microsoft Purview’s Information Protection capabilities layer together—specifically that sensitivity labels handle classification and protection, while DLP, retention, and auditing serve separate functions. A common trap is confusing DLP policies (which block sharing but don’t classify) with auto-labeling, or assuming retention policies can replace classification. Remember the memory tip: “Labels first for class and protect; DLP blocks, retention keeps, audit logs.”
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. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. 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.
Contoso Pharmaceuticals is implementing Microsoft Purview to meet regulatory compliance (HIPAA and GDPR). They need to: (1) automatically classify and protect patient health information (PHI) and personally identifiable information (PII) in Exchange Online, SharePoint Online, and OneDrive for Business; (2) detect and prevent unauthorized sharing of sensitive data; (3) retain audit logs for 7 years; and (4) allow users to manually apply classification labels to documents. The company has 5,000 users and uses Microsoft 365 E5 licenses. The security team wants to minimize manual effort and ensure consistent protection. What should the compliance administrator configure first?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "first"
Why it matters: Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Clue: "minimum / minimize"
Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Create sensitivity labels with auto-labeling policies configured to detect PHI and PII, and publish them via label policies.
Option A is correct because sensitivity labels with auto-labeling for file types containing PHI/PII provide consistent automated classification and protection across the specified workloads. Option B is wrong because DLP policies can block sharing but do not classify or protect data inherently. Option C is wrong because retention policies handle retention, not classification or protection. Option D is wrong because auditing is for logging, not classification.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Configure Data Loss Prevention (DLP) policies to block sharing of content containing PHI and PII.
Why it's wrong here
DLP policies block sharing but do not classify or protect the data itself.
✓
Create sensitivity labels with auto-labeling policies configured to detect PHI and PII, and publish them via label policies.
Why this is correct
Auto-labeling provides consistent classification and protection with minimal manual effort.
Clue confirmation
The clue words "first", "minimum / minimize" in the question point toward this answer.
Related concept
Static NAT maps one inside address to one outside address.
✗
Set up retention policies for Exchange, SharePoint, and OneDrive to retain data for 7 years.
Why it's wrong here
Retention policies do not classify or protect data.
✗
Enable auditing for all workloads and configure alert policies for unauthorized access.
Why it's wrong here
Auditing logs events but does not classify or protect data.
Common exam traps
Common exam trap: NAT rules depend on direction and matching traffic
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
How to think about this question
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
KKey Concepts to Remember
Static NAT maps one inside address to one outside address.
PAT allows many inside hosts to share one public address using ports.
Inside local and inside global describe the private and translated addresses.
NAT ACLs identify traffic for translation, not always security filtering.
TExam Day Tips
→Identify inside and outside interfaces first.
→Check whether the scenario needs static NAT, dynamic NAT or PAT.
→Do not confuse NAT matching ACLs with normal packet-filtering intent.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
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.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related SC-900 NAT questions on configuration and troubleshooting.
Describe the capabilities of Microsoft compliance solutions — This question tests Describe the capabilities of Microsoft compliance solutions — Static NAT maps one inside address to one outside address..
What is the correct answer to this question?
The correct answer is: Create sensitivity labels with auto-labeling policies configured to detect PHI and PII, and publish them via label policies. — Option A is correct because sensitivity labels with auto-labeling for file types containing PHI/PII provide consistent automated classification and protection across the specified workloads. Option B is wrong because DLP policies can block sharing but do not classify or protect data inherently. Option C is wrong because retention policies handle retention, not classification or protection. Option D is wrong because auditing is for logging, not classification.
What should I do if I get this SC-900 question wrong?
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related SC-900 NAT questions on configuration and troubleshooting.
Are there clue words in this question I should notice?
Yes — watch for: "first", "minimum / minimize". Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
What is the key concept behind this question?
Static NAT maps one inside address to one outside address.
About these practice questions
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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. Refer to the exhibit. You are reviewing a Microsoft Purview DLP policy configuration for a compliance team. What is the effect of this policy?
medium
✓ A.The policy blocks access but allows users to override with a justification
B.The policy automatically applies encryption to the content
C.The policy sends a notification but does not block access
D.The policy automatically blocks access without user override
Why A: The policy contains a BlockAccess action with BlockWithOverride behavior, meaning the action is blocked but the user can override with a business justification. The NotifyUser action sends a custom notification. Option A is wrong because it does not block automatically; it allows override. Option C is wrong because auto-apply is not an action listed. Option D is wrong because encryption is not configured.
Variation 2. A compliance officer needs to create a policy that prevents users from sharing files containing medical record numbers (MRN) via email. Which Microsoft Purview solution should they use?
easy
A.Sensitivity labels
✓ B.Data Loss Prevention (DLP)
C.eDiscovery
D.Insider risk management
Why B: Data Loss Prevention (DLP) policies are designed to detect and block sharing of sensitive information like MRNs via email. Sensitivity labels classify content but do not enforce sharing restrictions. Insider risk management and eDiscovery are not for blocking sharing.
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Question Discussion
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