Discovered by a user of Reddit, as these things often are, it’s emerged the Epic Games Launcher scans for your Steam install during each start-up and then grabs a snapshot of user files in the Steam Cloud, including data on game saves, play history, Steam friends lists, name history, and groups you’re part of.
In accordance with GDPR, you can request Epic removes all of your personal data, or they could face legal ramifications.
Steam Cloud data is stored locally in Steam>userdate>[account ID]. Epic feeds into this, pulls the data and then creates an encrypted copy which is placed into C:\ProgramData\Epic\SocialBackup\RANDOM HEX CODE_STEAM ACCOUNT ID.bak
The purpose of this appears to be to provide friend suggestions in the Epic Launcher, effectively linking the two systems up. This is done with the user’s express permission according to Epic. It’s tucked away into the lengthy agreement when installing the Epic Launcher and signing up for an account.