A few weeks ago there was a fairly big stink about Apple's policies for the new iAds service.

Recent Google acquisition AdMob has raised objections to one of the clauses in the terms and agreements Apple sets on developers that want to use iAds. The company said that no App would be allowed to use ads served by networks that were owned by a company that was in competition with Apple or otherwise not primarily in the advertising business.

Understandably, the move drew more than a but of objection, not only from AdMob and its fellow ad networks, but also reportedly from anti-trust regulators.

But the latest word is that Apple's re-thinking that policy, and allowing those supposedly forbidden networks to serve up ads on iAds after all.

The Wall Street Journal is reporting that AdMob ads are being allowed on Apps for iOS 4. A development which would either indicate that Apple has loosened its stance, or they just haven't gotten around to cutting the apps that violate the rule just yet.

Hopefully it's the former, as the ban made little sense and was an anti-trust case waiting to happen. We all know that the split between Apple and Google over Android wasn't very pretty, but cutting AdMob out of the App Store seemed like a rather petty move that would cost developers as much as it would cost any network.

It also would have devastated AdMob, who according to the most recent monthly report credits nearly half of its traffic to iOS devices. While such a move could have cost Google, which paid $750m for AdMob, it also would have reflected the exact sort of behaviour that got Microsoft in hot water with regulators.

In the end, easing off on these rules works out best for all parties involved.