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https://learn.microsoft.com/en-us/microsoft-365/compliance/sensitivity-labels?view=o365-worldwide#what-a-sensitivity-label-is When you assign a sensitivity label to content, it's like a stamp that's applied and is: - Customizable. Specific to your organization and business needs, you can create categories for different levels of sensitive content in your organization. For example, Personal, Public, General, Confidential, and Highly Confidential. - Clear text. Because a label is stored in clear text in the metadata for files and emails, third-party apps and services can read it and then apply their own protective actions, if required. - Persistent. Because the label is stored in metadata for files and emails, the label stays with the content, no matter where it's saved or stored. The unique label identification becomes the basis for applying and enforcing policies that you configure.
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