Data compression is the process of reducing the size of a file or data set. This is achieved by eliminating redundant information or using algorithms to represent data more efficiently. Common formats for compressed data include ZIP files and JPEG images, which allow for easier storage and faster transmission over the internet. There are two main types of data compression: lossy and lossless. Lossy compression reduces file size by removing some data, which can affect quality, while lossless compression retains all original data, ensuring no loss in quality. Both methods are widely used in various applications, from streaming media to file storage.