Penguin, Simon & Schuster Argue Merger Benefits Blunt DOJ Fears

Penguin Random House LLC and Simon & Schuster Inc. are battling the Justice Department’s lawsuit against their merger by contending the combination will generate efficiencies that outweigh any anticompetitive effects.

The department—zeroing in on the deal’s potential impact on highly paid writers—is arguing in the US District Court for the District of Columbia that the merger should be blocked because it would reduce competition for authors’ manuscripts worth more than $250,000. The publishers began presenting their side Wednesday.

The publishers maintain that US District Judge Florence Pan shouldn’t accept the department’s definition of the affected market and the alleged suppression ...