It can do both, lossiness is toggleable.
If you’ve seen a picture on Lemmy, you’ve almost certainly seen a WebP. A fair bit of software – most egregiously from Microsoft – refuses to decode them still, but every major browser has supported WebP for years and since superior data efficiency compared to JPG/PNG means is already very widely used on the web. Bandwidth is not that cheap.
At the end of the day these are commodity items. It’s reasonable for consumers to buy whatever’s cheapest from a reputable physical store and expect at least decent reliability.
The solution can’t come from a manufacturer making a better product, because of the information asymmetry; the average consumer just can’t be expected to spend hours researching every commodity item.
The solution has to be targeted legislative action with a clear goal of measurably improving the overall reliability of those commodities. Unfortunately lobbyists hate that because more reliability = less margin and fewer sales, and consumers don’t often love it either because this kind of legislation directly translates to inflated prices (at least in the short term). There are still people bitching that you can’t buy incandescent lightbulbs anymore… So regulators would rather play dead and hope nobody notices they are doing fuck-all.