In Microsoft’s Security, Compliance, and Identity guidance, encryption is described as the control that “converts data into a form that cannot be understood by anyone who does not possess the appropriate decryption key.” In the Microsoft Purview Information Protection (sensitivity labels with encryption) documentation, Microsoft explains that when encryption is applied to a file, “only authorized users and services that present the correct keys and usage rights can open and use the content,” and that access is enforced even if the file is moved outside the organization. Azure Rights Management (part of Microsoft Purview) further states that encryption “protects data at rest and in transit by using keys so that only permitted identities can decrypt and use the information.”

This aligns precisely with the sentence: encrypting a file makes the data readable and usable to viewers that have the appropriate key (and unreadable to those who do not). By contrast, archiving organizes or preserves data for long-term storage; compressing reduces file size without controlling access; and deduplicating removes redundant copies to save space. None of these provide the key-based, identity-bound access control described in Microsoft SCI materials. Therefore, the correct completion is Encrypting.