They've essentially created their own privatized law enforcement system. They aren't allowed to enforce their rules the same way a government would be, but punishment like banning a person from huge swaths of economic life can still be severe. The worst part is that private legal systems almost never have any concept of rights or due process, so there is absolutely nothing stopping them from being completely arbitrary in how they apply their punishments.
I see this kind of thing as being closely aligned with right wingers' desire to privatize everything, abolish human rights, and just generally turn the world into a dystopian hellscape for anyone who isn't rich and well connected.