Competition watchdog the CMA is calling on major supermarkets to act now after an investigation found Tesco has been unlawfully blocking rivals from opening shops near its stores.
The CMA said Tesco had prevented landlords from renting property to other supermarkets in more than 23 cases.
This, it said, may have reduced competition and lowered choice, leaving shoppers worse off.
Banning store openings is also unlawful under the Groceries Market Investigation (Controlled Land) Order 2010.
After this initial discovery by the CMA, Tesco reviewed all of its land agreements, finding 23 breaches in total.
Tesco said it has now agreed to improve its internal processes and staff training to avoid future breaches and ensure that all new land agreements are in line with the order.
The CMA said it will monitor the grocer's progress and may take formal enforcement action if further breaches are found.
The watchdog is now writing to all other supermarkets bound by the order (Waitrose, Sainsbury’s, Asda, Morrisons, M&S and the Co-op), asking them to show that their land agreements are not in breach.
If any supermarket is not compliant, the CMA will consider taking enforcement action.
Andrea Gomes da Silva, at the CMA said: " It’s unacceptable that Tesco had these unlawful restrictions in place for up to a decade. By making it harder for other supermarkets to open stores next to its branches, shoppers could have lost out.
"In the future, we want the ability to fine businesses if we find that they are in breach of our orders. That’s why we’ve called on the Government for more powers."
