The algorithm commonly used for data compression is the Huffman coding algorithm. This lossless compression technique assigns variable-length codes to input characters based on their frequencies. More frequent characters receive shorter codes, while less frequent characters get longer codes, optimizing the overall file size. Huffman coding is widely used in various applications, such as ZIP files and image formats like JPEG. Its efficiency and effectiveness in reducing data sizes without sacrificing quality make it a popular choice for data compression tasks in both text and multimedia files.