Well, for one thing, all photos larger than 16 megapixels are resized to 16 MP — so, for many cameras today, that's an immediate, obvious drop in resolution.

But all other photos are compressed too, using an optimizing compression algorithm. I don't think Google comes out and says exactly what they do, but it's probably their open source Guetzli algorithm. Google claims:

Guetzli-generated images are typically 20-30% smaller than images of equivalent quality generated by libjpeg.

Whatever they're doing, the results are pretty impressive — often much greater than 20-30%. (It probably follows that Google does not consider these really "equivalent quality".) You can see some side-by-side comparisons in this Phone Arena blog post.

But, to your title question: you are definitely losing some data. This algorithm isn't magic — it simply uses a perceptual model to discard visual data that conventional JPEG compression does not, resulting in higher compression rates while (hopefully) not causing any more disturbance to things that you can actually notice.

Only you can decide if you're okay with that. If you're backing up RAW originals (with adjustments also backed up) and can recreate the JPEGs at will, I wouldn't think twice about it. But if you're serious about photography and have a JPEG-centered workflow — and despite online RAW snobbery, that's fine — you probably want to at least keep the original JPEG files unaltered. Adding a terabyte of storage is only $10/month with Google. Or if you are an Amazon Prime customer ($100/year) you get actual unlimited photo storage, including of RAW files.