The format was designed by Phil Katz for PKZIP, and in the form now used (PKZIP 2 format) it uses his DEFLATE algorithm for compression.
The ZIP file format was originally created by Phil Katz, founder of PKWARE. Katz created the ZIP file format in response to a legal challenge by Software Enhancement Associates (SEA). SEA sued Katz because they believed his PKARC infringed on their own ARC which was a compression and archive utility they had created.
ARC was sold via shareware to mostly users of electronic bulletin board systems so they could package and compress files for upload and/or so they could decompress and unpack files after download.
Katz's PKARC performed the same functions as ARC on the .ARC file format, but did so much faster. Katz had created PKARC as would many programmers "because he could", and Katz made a much faster version than SEAs.
After SEA sued, Katz decided to cease and desist on PKARC and instead create his own file format PKZIP, and the .ZIP format he designed was a much more efficient compression format than .ARC. Once PKZIP was released, users quickly abandoned PKARC because of its slower performance and because they disliked the fact SEA sued Katz over his better mousetrap. Predictably, SEA soon ceased to exist.
Many software utilities other than PKZIP itself are now available to create, modify or open zip files, notably WinZip and Info-ZIP.History
Today
Today, zip files use the file extension ".zip" and have the MIME media type application/zip.