A WebmasterWorld thread explains that if you have two sites advertising for the same keywords and one is an affiliate for the other, they won't show the ad of both sites when the domain is the same, but the TLDs are different.
For example, if site A advertises domain.com in Google's AdWords. And also, site B advertises domain.co.uk in Google's AdWords. They both are bidding on the same keywords. In this case, only one of the two ads should be displayed according to Google's affiliate policy.
AdWordsAdvisor2 explains;
Under our affiliate policy, the .com and the .co.uk will be considered the same domain, so they should not both show ads at the same time. On a search where more than one ad with the same domain is available in the auction, we will show whichever one would have the highest position. There is no bidding competition between the same domain ads, so it should not effect what your actual CPC is on that search.
More details at AdWords Help.
Forum discussion at WebmasterWorld.
