- A
Create an auto-labeling policy to apply the 'GDPR-Protected' label to documents containing email addresses, and create a DLP policy for labeled documents that shows a policy tip when shared externally.
Auto-labeling applies the label automatically, and DLP provides the policy tip.
- B
Create a retention policy to tag documents containing email addresses.
Why wrong: Retention policies do not apply sensitivity labels.
- C
Create a sensitivity label policy that publishes the 'GDPR-Protected' label to users and train them to apply it manually.
Why wrong: Manual application is not automatic and may be missed.
- D
Create a DLP policy that detects email addresses and shows a policy tip, but do not apply a label.
Why wrong: DLP can show policy tips but does not apply labels.
Quick Answer
The correct answer is to create an auto-labeling policy to apply the 'GDPR-Protected' label to documents containing email addresses, and a DLP policy for labeled documents that shows a policy tip when shared externally. This works because auto-labeling in Microsoft Purview can automatically identify personal data like email addresses and apply a sensitivity label, while a separate Data Loss Prevention (DLP) policy with a policy tip provides a warning without blocking the action—exactly meeting the GDPR requirement for user awareness without disrupting business. On the SC-900 exam, this scenario tests your understanding of the distinct roles of auto-labeling versus DLP: auto-labeling applies labels based on content, while DLP enforces actions like tips or blocks. A common trap is confusing DLP’s ability to apply labels—it cannot; only auto-labeling or manual labeling does. For a memory tip, remember: “Auto-labeling applies the stamp, DLP gives the warning.”
SC-900 Practice Question: Describe the concepts of security, compliance, and identity
This SC-900 practice question tests your understanding of describe the concepts of security, compliance, and identity. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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.
You are a compliance officer for a law firm that uses Microsoft 365 E5 licenses. The firm must comply with GDPR. You need to implement a solution that automatically identifies personal data (e.g., email addresses) in SharePoint Online documents and applies a 'GDPR-Protected' sensitivity label. Additionally, you need to ensure that if a user attempts to share a labeled document externally, they receive a policy tip warning about GDPR compliance, but the share is not blocked. You have Microsoft Purview. What should you configure?
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
Create an auto-labeling policy to apply the 'GDPR-Protected' label to documents containing email addresses, and create a DLP policy for labeled documents that shows a policy tip when shared externally.
Option C is correct because auto-labeling applies the label, and a DLP policy with a policy tip (not block) warns users. Option A is incorrect because DLP alone cannot apply labels. Option B is incorrect because label policy only publishes labels. Option D is incorrect because retention policy does not apply labels or provide DLP tips.
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.
- ✓
Create an auto-labeling policy to apply the 'GDPR-Protected' label to documents containing email addresses, and create a DLP policy for labeled documents that shows a policy tip when shared externally.
Why this is correct
Auto-labeling applies the label automatically, and DLP provides the policy tip.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Create a retention policy to tag documents containing email addresses.
Why it's wrong here
Retention policies do not apply sensitivity labels.
- ✗
Create a sensitivity label policy that publishes the 'GDPR-Protected' label to users and train them to apply it manually.
Why it's wrong here
Manual application is not automatic and may be missed.
- ✗
Create a DLP policy that detects email addresses and shows a policy tip, but do not apply a label.
Why it's wrong here
DLP can show policy tips but does not apply labels.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Trap categories for this question
Command / output trap
DLP can show policy tips but does not apply labels.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
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.
- Use explanations to understand the rule behind the answer.
TExam Day Tips
- Underline the problem statement mentally.
- 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 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
Got this wrong? Here's your next step.
Identify which SC-900 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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Describe the concepts of security, compliance, and identity — study guide chapter
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FAQ
Questions learners often ask
What does this SC-900 question test?
Describe the concepts of security, compliance, and identity — This question tests Describe the concepts of security, compliance, and identity — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Create an auto-labeling policy to apply the 'GDPR-Protected' label to documents containing email addresses, and create a DLP policy for labeled documents that shows a policy tip when shared externally. — Option C is correct because auto-labeling applies the label, and a DLP policy with a policy tip (not block) warns users. Option A is incorrect because DLP alone cannot apply labels. Option B is incorrect because label policy only publishes labels. Option D is incorrect because retention policy does not apply labels or provide DLP tips.
What should I do if I get this SC-900 question wrong?
Identify which SC-900 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 21, 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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