The new Expanded Text Ads, a new Adwords feature rolled out in July, do not have preference or priority on the ad ranking.
This confirmation come in the Google Adwords Help, when Cassie, from Google, just wrote: “there will not be a preference given to expanded text ads vs. standard text ads in terms of which ads will win an auction. That’s still based on your ad rank (bid + quality score).”
Expanded Text Ads are the biggest change to text ads on Adwords since it was launched 15 years ago. This update allows advertisers to create ads 2x bigger.