"Data compression" is a technique in file management that reduces the size of data files, allowing for more efficient storage and transmission. By eliminating redundant or unnecessary information, data compression helps save disk space and decreases the time required to transfer files over networks. It is commonly used in formats like ZIP, JPEG, and MP3. Compression methods can be lossless, retaining all original data, or lossy, where some data is discarded to achieve higher compression rates, making it essential for optimizing storage and bandwidth usage.