J.,
My son had the same problem. It didn't start immediately after birth, but at about 3 weeks or so, it started on his cheeks, then spread, just as you described. I tried not to be bothered by it, and just chalked it up to being normal baby acne, but after a few days, I couldn't take it anymore, and took him to the pediatrician. They immediately felt it was an allergic rash, rather than 'baby acne', and recommended I stop eating dairy - I was nursing, and dairy is a big allergy culprit for infants. I stopped eating any dairy, and within a day or two after I stopped, the rash was COMPLETELY GONE. I'd definitely recommend getting a doctor's opinion on your baby's rash...