Newell chimed in at Reddit to explain why VAC make use of the DNS cache and why some data may be sent to the VAC servers:
'We don't usually talk about VAC (our counter-hacking hacks), because it creates more opportunities for cheaters to attack the system (through writing code or social engineering). This time is going to be an exception,' Valve founder Gabe Newell explained in his response to the furore on Reddit.Source: Bit Tech
'There are a number of kernel-level paid cheats that relate to this Reddit thread, claimed Newell. 'Cheat developers have a problem in getting cheaters to actually pay them for all the obvious reasons, so they start creating DRM and anti-cheat code for their cheats. These cheats phone home to a DRM server that confirms that a cheater has actually paid to use the cheat. VAC checked for the presence of these cheats. If they were detected VAC then checked to see which cheat DRM server was being contacted. This second check was done by looking for a partial match to those (non-web) cheat DRM servers in the DNS cache. If found, then hashes of the matching DNS entries were sent to the VAC servers. The match was double checked on our servers and then that client was marked for a future ban. Less than a tenth of one percent of clients triggered the second check. 570 cheaters are being banned as a result.
'Do we send your browsing history to Valve? No. Do we care what porn sites you visit? Oh, dear god, no. My brain just melted.'