The biodiversity loss of phytoplankton with eutrophication has been reported in many aquatic ecosystems, e.g., water pollution and red tides. This phenomenon seems similar, but different from the paradox of enrichment via trophic interactions, e.g., predator-prey systems. We here propose the paradox of enrichment by induced competitive interactions using multiple contact process (a lattice Lotka-Volterra competition model). Simulation results demonstrate how eutrophication invokes more competitions in a competitive ecosystem resulting in the loss of phytoplankton diversity in ecological time. The paradox is enhanced under local interactions, indicating that the limited dispersal of phytoplankton reduces interspecific competition greatly. Thus, the paradox of enrichment appears when eutrophication destroys an ecosystem either by elevated interspecific competition within a trophic level and/or destabilization by trophic interactions. Unless eutrophication due to human activities is ceased, the world's aquatic ecosystems will be at risk.