In fact only one keyword produces both ads appearing but it is an important keyword and there is a principle here of breach of terms. I had an online exchange with my local google office last week but nothing has changed yet. I have today submitted another request for investigation. Am I being intolerant and should my competitors be allowed to do this?
In general (per policy), a single advertiser is allowed to have ONE ad only showing at the time - period. This is regardless of the topic, industry, etc.
The only case when an individual or a company could have two or more ads showing at the same time would be an agency managing those accounts on someone's behalf. The key here would be that the actual owner of the account is NOT the agency, but whoever they work for.
So, in your case, if they've been acting on their own behalf, the accounts they use should be associated with each other, and therefore serve one ad only (from either account) on each query.
You also have to be patient with whoever you talk to at front support side as many times you'll get someone who sounds like straight from the high school, who will ask you to point to the part of the policy that covers your concern.