Yes, yes, yes, it's definitely malware: BT says so! (plus rant at no addtional cost)
BT: "customers whose DNS requests were being redirected must have a malware problem."
So even BT agrees that Phorm's system is malware. There you have it folks, straight from the horse's mouth.
Deeper thoughts: once again the malaise that infects business worldwide appears: the idea that you can do anything you want in the pursuit of profit (or shareholder value) as long as there's no explicit law against it. IANAL, but my understanding is that statute law is only part of the law, and a minor one at that, that common law is in fact the main part of law. Plus there's the old concept that the courts must seek justice, without being held to the restrictions of both statutory & common law: a legacy from the good old days of the Courts of Chancery.
Time for a new legal principle to be promulgated: business must act ethically, responsibly, honestly, morally, and openly at all times in all ways, never mind the impact of profit or shareholder value. Behaving honestly and morally, sensu *very* latu, simply becomes a condition for doing business at all.
As for the scumbags at Phorm and BT, we need a new legal penalty as well: do something dishonest, and you are issued a sort of ASBO that precludes you ever again being involved in business in any kind of responsible capacity. Perhaps tattoo the word "dishonest" across the foreheads of those found guilty? Think of it: no more directorships, no more management jobs, no job involving money or confidential data, nothing much but a being a salaried grunt at the lowest level of the hierarchy: the janitor or the guy who cleans the toilets, for example.
And make sure that even consultancies are out of the question.
Vengeance is mine, sayeth the Lord!