No it is not ebay policy as members are not supposed to list or sell elsewhere when they list on ebay
You can not force the seller to sell and neither can ebay
What did they choose as a cancellation reason
If they said you cancelled then report to ebay
If they chose another reason then they may be left with the fees and a defect on their account
They will pay the paypal fees anyway if you paid that way
You have feedback to leave Be careful what you say just something like seller would not honour sale
