Apple wanted to buy Admob, but Google got them instead. This change will prevent Admob ads from being well targeted on iPhone, and will prop up their (assumed to be upcoming) rebranded Quattro mobile ads.
This smacks of anti-competitive practices. (That is, assuming Quattro ads are allowed to use location aware targeting.)
You don't need to believe me though, here: http://en.wikipedia.org/wiki/Anti-competitive_practices (We can /all/ trust wikipedia, right?) "Barriers to entry" is relevant.
The point I was trying to make was: If we switched this around, and Microsoft had the number one smartphone, and they did something like this, regulators (though you're right, probably not American ones) would have them bent over a table.