An internal market operates inside an organization or set of organizations which have decoupled internal components. Each component trades its services and interfaces with the others. Often a set of government or government-funded set of organizations will operate an internal market. Services provided by an internal market are often but not always available on the open market.
In the United Kingdom, the BBC under John Birt introduced an internal market amongst its different components - Technology, Production, News and so on. The Thatcher government also introduced an internal market into the National Health Service in 1990, which split the purchase (GP fundholders) and provision (NHS Trusts) of health care in the UK, in order to promote competition between providers within the NHS.