So, recent findings indicate that Epic is datamining user's Steam account data and friends lists
Some points to consider:
1. Steam has an API for users and apps to share account data. Epic is bypassing the API and directly datamining the information from files in your steam folder.
2. Steam will not share your data if you set your account as 'Private'. Epic is ignoring this and grabbing your data anyway (which is probably why they're digging it up themselves instead of using the API).
3. Epic says they're only doing this "in case you want to import your friends list", but at best, they're pre-emptively collecting the data before asking the user for permission, and they've already collected the data even if you say "no" when they ask you.
4. Epic says the file is not uploaded to their servers until you give the permission, but that is not a water-tight statement (for instance, they could be grabbing metadata even if they don't directly access the information collected, or they could be uploading specific bits of information without uploading the whole file).
5. WTF? WTF, Epic.
EDIT: No, I don't personally think this is some conspiracy by the Chinese government to find out how many hours of L4D2 I played, nor do I think Epic has some grand supervillain plan in place that hinges on using my data, but at the very least, their actions display a disdain for their users' privacy, and a lack of transparency in their actions.
EDIT2: Tim Sweeney has commented on this
, and promised to not access localconfig.vdf before requesting user permission in future versions of Epic client.
Wind, Sand and Stars.