That article is talking about search engines, not second tier affiliates..
A second tier affiliate is one which has signed up for an affiliate account through your affiliate link. This is also called a subaffiliate. You get paid a % of what they make. So if they do compete with you in the same “sphere” you will make a percentage of whatever they make.
Some programs have 3rd tiers too, which will pay you a percentage of any affiliate’s commission that signs up to the affiliate program through the person you already referred.
Renee
Rewards Affiliates