In addition, API stands for Application Programming Interface. APIs take many forms, but when an API uses a web transport to communicate (such as HTTP or WebSockets), JSON is likely to be the data encoding it uses.
The benefit of JSON is that it is natively parsable in any JavaScript environment, as well as in many non-JavaScript environments, and is also human readable. The downside of JSON encoding is that it is not as dense as a binary format would be, and is incapable of representing some data types without further encoding (such as base64).