Because when he did bid he bid $00.06 higher than your highest bid.
Say the present bid was $4.50 and your highest bid was $6.00 then when he bid the bid showing was only $4.50 and he bid $6.06 which made him the winnwer.
If the bid showing was $6.00 and he tried to bid $6.06 it wouldn't have went through and you would have won for $6.00
Here is the link explaining increment bidding
http://pages.ebay.ca/help/buy/bid-increments.html