A local court also has unfrozen the assets of the two Chinese reporters, reversing an earlier move requested by the iPod manufacturer.
The decision to reduce the charges followed a protest by Reporters Without Borders. Apple also said that it had been working behind the scenes to resolve the issue.
Foxconn filed the charges against Wang You and Weng Bao over a story published in China Business News. The report was one of many concerning working conditions at a plant in Longhua where iPods are assembled.
The reports alleged that workers in the factory were underpaid and forced to work excessive overtime.
An Apple investigation found that Foxconn violated the firm's supplier code of conduct in some areas, but claims that employees were underpaid were proved wrong.
Although it is common for Chinese firms to file claims against publications that issue negative reports, the Foxconn case was unique because the company went after the individual reporters rather than their employer.
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