Lossy compression is a method of reducing the size of a file by permanently eliminating some data. This technique is commonly used for audio, video, and image files, where a perfect reproduction is not necessary. By removing less important information, lossy compression significantly decreases file size, making it easier to store and transmit. Common examples of lossy compression formats include JPEG for images and MP3 for audio. While these formats can lead to a loss of quality, they are often sufficient for everyday use, allowing users to enjoy media without requiring excessive storage space.