How can PHP developers effectively handle special characters like umlauts and accents in JSON data without compromising the encoding?

Special characters like umlauts and accents in JSON data can be effectively handled by using the `json_encode` function with the `JSON_UNESCAPED_UNICODE` option. This option ensures that Unicode characters are encoded as-is without any additional escaping, preserving the original characters without compromising the encoding.

$data = ['name' => 'Müller', 'city' => 'Paris'];
$json = json_encode($data, JSON_UNESCAPED_UNICODE);
echo $json;