GNU Collaborative International Dictionary of English

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Found one definition

1.       
   lossy compression, n. (Computers) The compression of binary data into a form which, when it is re-expanded, has most, but not all, of the original information.  It is used primarily for compression of images and sounds, and is designed to provide a high degree of compression at the cost of a slight loss of data.  It is expemplified by the JPEG compression standard.  Images compressed by a lossy compression algorithm are re-expanded into an image close, but not identical to the original image; the difference between the original and the reconstructed image may be imperceptible to normal viewing by the eye.
   
   [PJC]