[PeterisP]

If you pay money to someone from Belgium for a service (which, in a legal sense, is how Google Summer of Code works) then that transaction is definitely subject to Belgian laws.

Just as if you sell something to someone from Belgium over the internet, both your and their law applies.

[kintamanimatt]

If I sell something to a Belgian and I'm, say, a Canadian company, I don't suddenly become subject to Belgian law. I don't have to account for distance selling regulations, data protection regulations, VAT, local taxes or anything else. I'd be subject to Canadian law, and that's all. Chances are the contract would even state that the jurisdiction were somewhere in Canada. (Yes, I know contracts aren't always perfectly binding or valid, and just because something is declared in a contract doesn't mean it's enforceable or valid.)

Consumer could sue in Belgian courts but the matter of jurisdiction would arise and that's where the claim would fail.

[PeterisP]

Jurisdiction may be disputed, and yes, in sales disputes it might be decided that Belgium doesn't have jurisdiction over that contract if you have no subsidiaries or other relations there. Still, even in your case the "target" country law does apply for whatever things happen on their side of the border - and it may impact you. Say, if the item is considered illegal there then it may be confiscated at customs, leaving you without the item and payment; and your local courts won't help you there.

But in Google Summer of Code case, if it's treated as 'work for hire' then the host country definitely has jurisdiction as the actual work happens there. And Google has subsidiaries worldwide (used for ad sales), so they can easily be targeted.